The Study On The Correlations Between The Status Of Purchasers In Private Placements And Profitability Of Listed Companies

Since China Securities Regulatory Commission promulgated and implemented the"Administrative Measures for Listed Companies Stock Issuance" on May,2006 and "Operation Standards for Listed Companies Non-public Offering" on September,2007, Non-public Offering (Private Placement equity) has become a important way of re-financing in Chinese stock markets and keep developed rapidly.On 2010,there are 146 companies run private placement successfully and raised up funds 242.3 billions.There are 9 companies public offering successfully and raised up funds 40.9 billions.Therefore,private placement have exceed greatly both in the amount of funds and the quantity of refund company toward public offering,and Private Placement equity has become the most important re-financing in A-share listed stock market.Private Placement equity is a mature re-finance way,and Popular on the international capital market many years, Foreign scholar had conduct many research on Private Placement equity. Until 2006, Private Placement equity become a common re-finance way in our country, there are no many research on Private Placement equity of domestic scholar. Domestic scholar mainly focus their research on private placement equity Announcement effects, private placement equity and major shareholders expropriation, the status of investors of private placement equity, but there are seldom research on the correlation between private placement and profitability. So the research on the correlation between private placement and profitability would be valuable both in practice operations and theory research.In this paper,we use 107 Chinese A-share listed companies which have implemented private placement in 2007 as the sample, base on theory and empirical analyses we have following conclusions:(1)The reasons of Private Placement equity become the main way of re-finance is it have advantage in regulation system, finance cost and optimiveing corporation governance.(2) Private Placement equity is a Double-edged sword to company profitability, regulators and investors should rationally view effect of private placement equity to companies'profitability.(3) Base on T-test and mean analyse we found the profitability of sample companies decline after private placement equity.(4) The buy rate of Major stockholders'in private placement equity have positive correlation to companies'profitability.(5)The amount of re-finance fund have negative correlation to companies'profitability. Base on the research before, we analyse the reason of profitability decline after private placement equity and give some suggestions.