When do high stock returns trigger equity issues?

One of the most prominent stylized facts in corporate finance is that firms are more likely to issue equity following periods of high stock returns. We document that firms exhibit such timing behavior only in response to high returns that coincide with strong institutional investor demand for their stock. When not accompanied by institutional purchases, stock price increases have little impact on the likelihood of equity issuance. The results suggest that potential issuers pay close attention to who stands by their stock prices.