The Research On The Financial Performance Of Listed Companies For Private Placement Based On The Perspective Of The Corporate Life-Cycle

Since Securities Market’s share structure split reform was succeeded in2006,SFC openedthe door of private placement for listed companies,promulgated <Administrative Measures forListed Companies’ Stock Issuance>that explained private placement at first.Private placementbecame the new darling of listed companies for its low standards at once and it is still thepreferred equity financing of listed companies today.On the other hand,according to short ofavailable information,private placement of listed companies produced too late than foreigncountries’.So there wasn’t mature mode of operation and the relevant laws and regulations inChina.Since there was no operating mode of the system,many listed companies were just on acopy road and lacked of a comprehensive understanding of private placement.Judging fromthe current situation of our country,we must seriously study the results of private placementfinancial performance of listed companies in China and sum up a set of private placement’slessons for Chinese listed companies.It does not only make listed companies to meet theurgent need to improve the financial situation,but also improve the efficiency of capitalmarkets.What’s more, it is the fundamental guarantee for guiding direction of development ofcapital markets.Therefore, this paper will mainly study the financial performance of listedcompanies for private placement and will be combined with enterprise’s life-cycle theory.hope that it can play a reference role in corporate finance from different perspectives.At first, the article introduces the background and significance of the research andsummarizes domestic and foreign theory researches.Then the article comments related theoryresearches and describes definitions, principles, procedures, purposes,advantages anddrawbacks of private placement.What’s more,the article also introduces the definition,standardand dividing method of life-cycle theory and tells readers why author studies the issue ofprivate placement from the life-cycle theory.In the empirical research part,article will combinethe private placement theory with the life-cycle theory, divide listed companies which haveconducted private placement into five phases through a Dickinson cash flow method andmeasure the impact of the private placement for listed companies’ performance.The articlewill construct a comprehensive score function of operating performance to do dimensionreduction with these14indexes in the financial index system and to extract5common factorfrom those indexes.Through calculating the scores of5common factors,we can get acomprehensive score of operating performance for measuring the operating performance of listed companies in different life-cycle sections.The result shows that listed companies willget different performances in different life-cycle sections to have a private placement.What’smore,the listed companies in growable life-cycle sections will get a best short-term financialperformance.