Study The Pricing Factors From The Private Placements Of The Listed Companies In China

Private placements have been more and more popular in recent years for its advantages. Deeper study on private placements may improve its government policies and give good advice to the companies., and the pricing for private placements is an important part of the research. This paper studies the influencing factors of pricing for private placements and considers if these factors influences pricing differently under different capital market period.In this paper, firstly, we have the sample starting from2006to2010as an entire market period to discuss the issue. Then, the sample is devided into two small samples by different capital market period, and we consider the same issues in different samples to find if different results happen. Issues are researched by the establishment of multiple linear regression models and using statistical software SPSS17.0. We found that: firstly, when the liquidity of private placements is smaller, the more compensation for the investors, and the liquidity of private placements is affected little by the market cycle; secondly, when the size of company is larger, the costs of the information asymmetric diluted, so the discount is lower, the same happens when the market advances, however, when the market declines, the application of information asymmetry theory is blocked; thirdly, in the whole sample, as the scale of the listed companies is the larger, the discount is higher, for the company's organizational structure is more complex, and the investors need to pay more for investigation, the same happens when the market declines, then when the market advances, the investor is in high spirits, and the costs of investigation become little important for them, so the scale of the company is not significant for the equity discount; finally, when the subscription of major shareholders is bigger, their motivation of transferring benefits from companies is greater, so the discount is higher. We do not find the way of major shareholders'subscription is relevant to the discount of private placements.Based on the analysis, we advice that the determine principle of benchmark date should be improved and the liquidity should be increased. Therefore we could avoid the tunneling by the major shareholders and protect the benefits of small shareholders.