A Study On The Motivation And Economic Consequences Of Large Shareholders’ "Clearance" Reduction

After the split share structure reform,major shareholders can directly trade in the secondary market to realize their equity.However,this has also brought new ways for major shareholders to reduce their holdings,and chaos in reducing their holdings frequently occurs.Due to the important position and resources of major shareholders in listed companies,their malicious reduction behavior has a significant impact on small and medium-sized shareholders.Therefore,the China Securities Regulatory Commission has issued a series of regulations to reduce the negative impact of major shareholder reduction on the securities market.However,with these regulations,the problem of reducing the shareholding of major shareholders in listed companies still exists.This is mainly because some major shareholders will reduce their holdings of stocks to obtain funds when facing liquidity difficulties or financial pressure.In addition,some major shareholders may also use shareholding reduction to control corporate governance and obtain more benefits,which makes it possible for major shareholders to liquidate their holdings.Large shareholders’ liquidation and reduction behavior also has adverse effects on the economic consequences.First,it may lead to a decline in the company’s stock price,reducing the company’s market value and investor confidence.Secondly,it may lead to the depreciation of the shares of small and medium-sized shareholders,damaging their interests.Finally,if the proportion of major shareholders reducing their holdings is too large,it may also lead to changes in the company’s control rights,which may affect corporate governance and operating policies.This article uses the case study of the large shareholder liquidation reduction event of Pathfinder Holdings Group Co.,Ltd.as the object of the case study.Based on information asymmetry,principal-agent theory,and signaling theory,case study methods and event study methods are used to deeply analyze the motivation,market reaction,and impact on the company’s operating performance of the large shareholder liquidation reduction event of Pathfinder Holdings Group Co.,Ltd.The main conclusions are as follows: First,in the process of clearing positions by major shareholders of Pathfinder,obtaining high arbitrage returns,avoiding operational risks,and supporting the development of the company are the main motivations for major shareholders to reduce their holdings.Secondly,Pathfinder’s major shareholders have mainly adopted two methods to reduce their holdings: information disclosure and earnings management.Thirdly,the repeated reduction of the majority shareholders of Pathfinder has had different impacts on the share price and operating performance of Pathfinder,and the impact of different reduction environments varies.Finally,this article makes recommendations from the government,company,and shareholder levels,and proposes prospects for the lack of research.In summary,the liquidation reduction of large shareholders is a complex issue involving multiple factors,and its impact and consequences need to be analyzed and studied from multiple perspectives.Regulatory authorities,listed companies,small and medium-sized shareholders,and other parties need to work together to strengthen information disclosure,improve corporate governance,improve information access and risk awareness,reduce the risks caused by large shareholders’ liquidation and reduction,stabilize the operation of the capital market,and protect the interests of small and medium-sized shareholders.At the same time,it is also necessary to continue to conduct in-depth research on the motives and economic consequences of large shareholders’ clearing positions to reduce their holdings,formulate more precise policies and measures,and provide support and protection for the healthy development of the capital market.