| Eight listed companies listed in SME firstly in2004. From then on, China’scapital market has a new member—small and medium-sized enterprises board. Today,SME, which carries the hope of small and medium-sized enterprises, has become themost efficient and the most dynamic financing platform for private companies. SMEhas brought up a lot of excellent fast growing enterprises during the seven years,which made enormous contribution to the national economy’s healthy development.When we focus on the shinning outside of the SME, executives monetization from theSME listed company exploding by media again and again, has forced the market tothink over the future growing path of the SME. Chen Yisheng, director of Katie power,earned580,000,000from monetization; Jiang Chun, chairman of Jingchen copper,earned570,000,000from monetization…… A pile of such examples shock the market,people begin to doubt whether it is normal for listed companies’ executives selling somany stocks, or whether there is a deep institutional distortion hidden behind?This article takes533listed enterprises from SME as examples. We choose thedata between January1st2009and December31st2010, which contains about3,789observed values, to analyze the relationship between information superiority andexecutives’ monetization. In this paper, we use “event study” method to do adescriptive statistical analysis on executives’ monetization. Compared with the CARvalues before and after the transacting, we find the fact that the executives has anability of choosing precise time to sell their stocks. The CAR values increased beforeselling and dropped after the stock monetized. In the empirical part, this paper dividesinformation into two types called valuation information and performance predictioninformation. We use the index called executives monetary strength to represent theprobability of executives’ monetization. The result shows that when the market priceis higher than the enterprise’s actual value, or the executives forecast the company’sfuture performance will decline, they will probably sell their stocks to earn the profit.In the last part of the empirical part, we use net selling propensity index to make arobust text. In this article, in addition to the empirical analysis, we also adopts themethod of case study. Choosing Hanwang technology as a typical example, weanalysis the cumulative abnormal return as well as the valuation advantage andperformance advantage, and find the result support the conclusion of the empiricalpart, which confirms again that the selling time of the executives’ monetization based on the private information and they seize the opportunities to sell the stocks when theprice is relatively high.Executives’ monetization is an important signal. When it happens in a smallscope, it means the executives have a different view with the market on theenterprises’ value, so they sell the stocks personally. If it happens on a massive scale,it may be a sign that our capital market pricing system has a problem on running andour incentive mechanism has distorted. Therefore, analyzing the relationship betweeninformation superiority and executives’ monetization in depth, not only can providedirection when the investors making investing decisions, but also can provideempirical support for the authorities to make future regulatory policy. Only bystrengthening market supervision and disclosing information regularly, can establish atruly open, fair, just and healthy developing capital market... |
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