The Study On The Correlations Between Subscription Behavior Of The Major Shareholder And Wealth Effects Of Private Placements

Since the split share structure reform, private placements have been the main way of equity refinancing in China. The stock price performance of private placements has always been concerned. The investment identity of private placements include the major shareholder and other investors. Until now, the major shareholder has attracted much attention in practice and theory. Then, as the major investor or the issuer of private placements, what is the effect of the major shareholder to the listed companies and capital market in the split share structure reform? Thus, this paper try to studies the relation between subscription behavior of the major shareholder and wealth effects of private placements.This paper based on A share listed company samples which successfully implemented the private placements during 5.2006 to 12.2012. The results show that:(1) short-term wealth effects of private placements are significantly higher when the shares are placed with the major shareholder than only with other external investors;(2) long-term wealth effects of private placements are significantly higher when the shares are placed with the major shareholder than only with other external investors;(3) there is no significant difference between short-term wealth effects of private placements when subscription method of the major shareholder is related or non-related;(4) long-term wealth effects of private placements are significantly higher when the major shareholder injected related assets into listed companies than non-related assets.