| Private placement is a sort of directional offering, which has been more and more popular with both listed companies and investors, though the investors of private placement need to lock the stock at least for several months. For listed companies, private placement has many advantages, such as low threshold, quick approval process and so on. So companies with poor financial situation can also raise money through this channel; for investors, because there is usually a discount of issuing price, they can get the shares with lower price. Before the reform of non-tradable shares, the relevant laws and regulations hadn’t been legislated, listed companies preferred public offering and allotment to private placement. Since the reform of non-tradable shares began and relevant laws came out, many companies have chosen private placement. The amounts of private placement events increased from 5 in 2005 to 476 in 2014. Private placement is a significant trade, so its announcement will affect the choice and expectations, and the price of the company stock in security market will change.Based on this, the paper uses the method of event study to analyze private placement, and use abnormal returns to analyze the impact of the announcement. In the first chapter the author introduces the background, significance and innovations of the research. In the second chapter, the author introduces some foreign and domestic research and makes some summaries. In the third chapter, the author introduces some relevant hypotheses, also, the author makes a comparison between private placement and public offering. In the fourth chapter, the author chooses 299 samples of private placement which occurred from January 2013 to June 2015. In the fifth chapter, the author makes some demonstrations. Firstly, the author makes One-Sample T Test of every day in the windows of minus ten to fifteen ([-10,15]) for all samples, and chooses three small windows [-5,0], [-5,5], [1,15] to describe the effect more precisely. Then the author divides all the samples into several groups by different stock exchanges, different market conditions, different objects and different scales, and tries to analyze the effect of this four factors. Finally, the author chooses the cumulative abnormal return ([-10,15]) as dependent variable, selects 3 factors which are relative with private placement and 6 financial index of the listed companies as explanatory variables, and uses multiple linear regression analysis to estimate the influence of 9 explanatory variables.We find for all the samples, the effect of the announcement appeared 10 market days before the announcement day, we can attribute that the news of private placement had been revealed in advance. The research of the different-stock-exchange factor shows that the companies of second-board market response more positive effect then those of main-board market. The research of the different-market condition factor shows that the events of private placement occur in bull market perform more positively. The research of the different-object factor shows that the performance will be much better when the company’s big shareholders participate in the private placement. The research of the different-scale factor shows that bigger scale of private placement can bring more positive performance of the stock. The regression result shows:Adjust scale, positive market condition, objects with company’s big shareholder, P/B ratio, ratio of book value to market value, ratio of fixed asset turnover and rate of return on common stockholders’equity have a positive correlation with the dependent variable, while company’s size and the debt to assets ratio have a negative correlation with the dependent variable. Except rate of return on common stockholders’equity and the company’s size, other seven explanatory variables all pass the significant test. In the sixth chapter, the author gives some suggestions according to the previous discussions and demonstrations, the author also gives some disadvantages of this paper. |
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