Researchs On Affecting Factors Of Directional Private Placement’s Discount

Private placement has become the primary refunding method with equity for Chinese listed companies in these years because of its low-threshold and flexible.There always will be discount when processing private placement, which will have an affect on the original shareholders, especially on minority shareholders.This paper focus on the pricing of private placement by analyzing the influencing factors, which offers advise to protect minority shareholders so as to develop resource allocation.We dealt with the discount rate of listed companies by 342 samples which were processing private placement from 2006 to 2009.By regression and robust test, we find that information asymmetry is the major factor of private placement price, the more asymmetrical the higher discount rate; If all the investors are majority shareholders and majority shareholders’related parties, the discount rate will be high,and if institutional investors participates the private placement, the discount rate will be low; The longer of the stock locked time and the lower liquidity, the discount rate will be high. In order to protect the original shareholders, especially the minority shareholders, when processing private placement the company should try to lower the discount rate, decrease information asymmetry, enhance the rate of the institutional investors and according to the listed companies issuing object of directional private placement implement different classified regulation,or moderate plans to gradually unified and shorten the directional share stocks’limited sale period.