The Empirical Research Of Non-public Offering Of A Shares

With the expansion of the capital market and the improvement of financing mechanism, China launched non-public offering (NPO) in May 2006. In less than two years, NPO has become a significant way for all listed companies in both Shanghai and Shenzhen Stock Exchange Markets. In the related field abroad, a lot of studies and theories on NPO have been maturely developed. Yet in China, it is theoretically and empirically lagging behind. This article draws on the strengths and weaknesses of relevant researches on NPO from foreign papers, as well as the development of NPO in China.In this paper, three aspects of non-public offering are analyzed: Firstly, why listed companies in China prefer NPO from a theoretical perspective; Secondly, the possibility that NPO in China's has a Notice Effect was tested; Thirdly, the influence that the constituent elements of non-public offering has on the notice effect.In the last, we summed up our research and come to four conclusions, the conclusions of which include: 1) the cost of debt financing for NPO is far less than that of equity financing; 2) Leakage of information before NPO exists; 3) Among all the factors, the type of subscribers has the most significant effect on NPO; and 4) there is the "90% invalidity" in the capital market in China. In response to the above problems, several solutions are proposed at the end.