Research On The Motivation,Timing And Influence Of Major Shareholders’ Cash Out Behavior Under Continuous Mergers And Acquisitions

With the continuous development of the economy and the increasing competition among companies,mergers and acquisitions have become one of the important ways for companies to grow rapidly and improve their value.However,in the upsurge of mergers and acquisitions,there are many cases in which major shareholders implement cash out by means of reducing their holdings and equity pledge for personal gain,which not only infringes the vital interests of small and medium-sized shareholders and weakens the investment confidence of external investors,but also has a negative impact on the sustainability of the company’s image.In the long run,it will not be conducive to the healthy and stable development of the entire capital market.In order to study the cash-out activities of major shareholders of listed companies in the context of continuous mergers and acquisitions,this paper,based on the research of the existing literature,according to the information asymmetry theory,signal theory and principal-agent theory,uses the case study method,selects Jinyi Culture as the research object,and analyzes the means,motivations,timing choice and the impact of the behavior of major shareholders in the context of continuous mergers and acquisitions since 2014;At the same time,this paper also uses the event study method to select four representative cash-out behaviors of the major shareholders of Jinyi Culture,and demonstrates whether the cash-out process of the major shareholders is opportunistic by comparing whether the excess cumulative rate of return presents an inverted V shape before and after the cash-out.This paper hopes that the above research can provide some feasible suggestions for the regulatory authorities to strengthen supervision,self-management of listed companies and strengthening risk awareness of external investors,so as to improve the risk awareness of small and medium-sized shareholders,protect their legitimate rights and interests,and promote the healthy and orderly development of the capital market.Through research,this paper finds that:(1)major shareholders mainly use equity pledge and stock reduction;(2)The main reasons for the major shareholders of Jinyi Culture to cash out in the context of continuous mergers and acquisitions are to avoid the risk of goodwill impairment,to predict the company’s poor performance prospects,to obtain excess earnings,to overdraft the company’s reputation to meet personal capital needs and motivated by a negative attitude towards the company’s prospects;(3)In terms of the timing of cash out,the company tends to release "good news" in advance,and postpone the release of "bad news".The excess cumulative rate of return before and after the cash out of major shareholders presents an inverted V shape,and its cash out behavior is opportunistic;(4)The cash-out of major shareholders has brought adverse effects on the company’s performance and small and medium-sized shareholders: on the one hand,the company’s performance has further declined,the capital chain has broken,the control right has been transferred,and the company’s value has been damaged;On the other hand,the interests of small and medium-sized shareholders are damaged and investment confidence is weakened.Based on the above research results,this paper suggests that the regulatory authorities should strengthen supervision,increase the cost of illegal activities,strengthen the supervision of listed companies before,during and after mergers and acquisitions,and also strengthen the construction of information disclosure system of listed companies;At the same time,it is suggested that listed companies should improve their internal governance,focus on the industrial development of enterprise,and avoid mergers and acquisitions guided by short-term interests;Finally,it is recommended that external investors strengthen the knowledge reserve related to investment and maintain a rational investment mentality.