skip to content

Cambridge Endowment for Research in Finance (CERF)


Oğuzhan Karakaş


Phantom of the Opera: ETF Shorting and Shareholder Voting 

The short-selling of exchange-traded funds (ETFs) creates “phantom” ETF shares, trading at ETF market prices, with cash flows rights but no associated voting rights. Unlike regular ETF shares backed by the underlying securities of the ETF and voted as directed by the sponsor, phantom ETF shares are backed by collateral that is not voted. Introducing a novel measure of phantom shares both of the ETF and corresponding underlying securities, we find that increases in phantom shares are associated with decreases in number of proxy votes cast (for and against), and increases in broker non-votes, the vote premium, and value-reducing acquisitions.

Project Update - August 2021

Project Update - April 2021

Project Update - August 2020

Project Update - April 2020

Title of Research: Competition and the Value of Voting Rights 

We aim to examine the impact of product market competition on the value of shareholder voting rights (i.e., voting premium) for the US public firms. We will estimate the voting premium using option prices following the method introduced in Kalay, Karakaş, and Pant (JF-2014). We conjecture that competition will decrease the voting premium, which is a lower bound for private benefits of control. To establish the causal effect of competition on voting premium, we will exploit exogenous shocks to competition. We also plan to investigate the role of common ownership in the relation between competition and voting premium.

Project Update - August 2019

Project Update - April 2019