Research On The Delisting Of Overseas Listed Chinese Companies

China Concepts Stock is a set of stock of companies whose assets or earnings have significant activities in mainland China.Compared to delisting, IPO is more widely discussed. IPO can make it possible for companies to obtain funding, enhance market influence and improve corporate governance. However, delisting is the reverse process of listing, the company change from a public company into a non-public company with its stock get out of the Exchange. From this perspective, the study of delisting provides a better method to examine the motivation and goals of going IPO.As being a public company become less advantageous, delisting will save the company from suffering financial difficulties. Due to the gap between the development of capital markets of aboard and domestic, foreign market is more flexible and efficient. Delisting is the result of a listed company's survival of the fittest, which effectively contribute to the effectiveness and the efficient allocation of capital. The domestic market situation is much more complicated, although there are relevant delisting system introduced, few companies will choose to delist in practice, not to mention withdraw from the market voluntarily.Of course, this situation is closely related to the scarcity of IPO in Chinese market. Many high-tech companies cannot meet the standards of IPO in domestic while the future development needs more currency, so they seek IPO overseas.With the currency of more and more China concept stocks choose overseas capital market, the wave of delisting still exist. Since 2010, the US capital markets has triggered the wave of delisting due to the crisis of trust of China concept stocks, the delisting phenomenon has been a hot topic all the time. The reason for this issue is complicated, including being shorted?undervaluation and the domestic bull stock markets.According to the study abroad, early research mainly focused on theoretical research, recently, empirical studies tend to discuss institutional investors and shareholder returns and so on. The domestic research start a little late, basically focus on the applicability of foreign theories and case studies.Based on the above study, this article first discuss the delisting motivation, delisting method, strategic adjustments after delisting. Subsequently, use the case study approach combined with theoretical analysis to discuss the going private process in practice. This paper takes Focus Media (NASDAQ:FMCN) as an example, the reason is there are only few companies can go IPO again after going private, and also this case is very new with more explore value. This paper analyzes the motivations and the capital operation process of Focus Media delisting and evaluate the possible benefits and potential risks behind this. PPP (Public-Private-Public) policy is another important issue. Finally, according to the summary of this case, this paper indicates that company should make a rational choice when facing delisting proposal. The whole text is divided into five parts:Chapter I introduces the background of this article and then show the method and structure of this paper. First theoretical and practical research is not adequate, which leads to the significance of this article. At the same time, the specific research methods and ideas presented in this part give readers a general understanding on the overall framework of this paper.Chapter II is about literature review, the whole text is divided into domestic and foreign parts, and introduces the meaning of delisting, the motivation of delisting and the protection of minority shareholders respectively. Overall, foreign literature is more deep and systematic compared to native research.Chapter? is the theoretical analysis, discussing the motivation and strategy selection. This chapter begins with an overview of the situation of delisting, then analyzes several possible reasons combined with the data, the results show that the strategy adjustment and undervalued stock price are the main causes. Thereafter, this chapter discuss the basic process of delisting and the characteristic of four different ways of delisting. The last part is about strategic choice after the delisting, firstly introduced the basic meaning and composition of the red-chip mode and the VIE structure and difficult part of remove this issue and, finally, we discuss the risk of PPP strategy.Chapter ? is the key part of this paper, this chapter takes Focus Media, as an example, discusses the main motivation, operation process and financial arrangements for delisting. It shows that being shorted frequently is part of the reason, but undervalued and strategic adjustment are the main driving force in fact, the privatization process use a common offer way acquisition, and external financing. The introduction of third-party investment agency approach to ensure the fairness of the transaction, and the multi-tier acquisition system also ensures that funding is sufficient. The former controlling shareholder's shares rose by delisting transaction, outside investors also get a reasonable premium. Finally, the paper discusses transaction details and make a summary.Chapter ? is part of the research prospects. There are still shortcomings in this paper, so by offering possible research directions this article hope to make a little small contribution for future research.