Empirical Reasearch On The Influence Of Private Placement’s Characteristics To Its Discount Rate

Private placement is one of the most important ways of financing for companies listed in the"new three board".To some extent,the milder conditions and more flexible mechanisms of private placement solve the problem for micro-sized enterprises to finance.However,it encourages bad behaviors,such as the controlling shareholders infringing the interests of minor shareholders,which are bad for the benign development of the market.There is a trend that the private placement stock price is usually much lower than the intrinsic value of the stock.The article elaborates upon document research and theoretical analysis and tries to explore the relationship between the characteristics and discount rates of private placement.The article elaborates through the view of private placement target and objective,stock liquidity,reputation of lead underwriter,relative financing scale.And discuss the high discount rate of private placement in "new three board",the tunneling behavior of the controlling shareholders,inactive trade and financing for liquidity behaviors.The article uses the successful cases of private placement as our samples to testify our hypothesis.The results showed that:1)More the controlling shareholders participaties in,the clearer the tunneling phenomena.2)With the participation of external agencies,the original shareholders and management tents to set a higher price to maximize their wealth and avoid regulation.3)With the purpose of cash liquidity,the private placement can only be considered as improving short-term financial condition of the company.In this case,the discount rate is usually higher than those with the purpose of long-term good.4)The stock liquidity of the company is inversely proportional to the private placement discount rate.The discount is regarded as the compensation for the lack of liquidity of the target asset.5)The lead underwriters with better reputations often have stronger bargaining power,and the discount rate is often lower.6)The total asset of the private placement company is proportional to the difficulty of the private placement and the discount rate.Therefore,the article puts forward some suggestions to the regulators,financiers and investors.