Analysis Of M&A Performance Of GEM Companies In China

A share IPO was suspended since October,2012. Moreover, IPO was re-suspended for an unexpected period, after48companies were listed in the Shanghai and Shenzhen stock market during the period from January8to February11,2014. Obviously, the IPO suspense had an uncertain effect on the market participants.The article focuses on the history of the domestic stock market of IPO pause for the longest time. By studying on the substantial growth M&A cases of GEM companies in2012and2013, we found that the directed additional way mostly recognized by the market investors. As a result, the mergers’ stock price were increased significantly.To address this phenomenon, the article analyzed the M&A situation of GEM listed companies in China, based on the theories of M&A and general M&A development of GEM listed companies in China, In the end, through substantial evidence analysis, we concluded the M&A performance by the directed additional way of GEM companies in China.The analysis on theories and the cases are combined together in this article. It concludes that,(1) The M&A based on the directed additional way of GEM companies, has insignificant negative effect on EPS (earnings per share) in the short term (24months).(2) The M&A based on the directed additional way of GEM companies, has significant positive effect on PE (price-earning) for the M&A year, but has insignificant effect on PE (price-earning) the next year.