The Research Of Effect On Stock Price Of The Major Holding-shareholders’ Reduction In Listed Companies Of GEM

With the advantages of high growth, bright development prospect and small scale, listed companies of GEM are favored by speculative money. Most of the listed companies come with high initial public offering price and excess funds raised when launching IPO. Institutional investors are active in the process and rise the GEM Composite Index all the way up. Behind the overvalued and high-risk speculation in listed companies is the upsurges of major shareholders’ reduction. In growth enterprise market, the game between speculation and reduction is quite obvious. Comparing to other small and medium-sized investors, major shareholders have clear advantages in information and controlling interest, so that they can get the company’s business information and estimate its future development more accurately. In fact, before and after the announcement of major shareholders’ reduction, the company’s share price will rise or fall dramatically, which makes people think about the compliance of major shareholders’ reduction.In the first two parts of this thesis, the author will summarize related research results got by scholars home and abroad, and then analyse the motivation of major shareholders’ reduction and influence mechanism to share price effect. In the third part, transaction details of every reduction more than 1% by major share holders whose share proportion is over 5% in listed companies of GEM (not ST companies) from Nov.1,2010 to Nov.1,2014 are taken into research and share price effects caused by major shareholders’ reduction will be studied with Descriptive Statistics Analysis and Event Study Methods. After that, the underlying reasons will also be studied with Multiple Regression Analysis. Finally, conclusions will be made and practicable measures to supervise major shareholders’ reduction in listed companies of GEM will be discussed.