A Study On Thecorrelation Between Private Placement And "High Send And Transfer"

In all the refinancing methods,private placement(non-public offering)requires less profitability for listed companies,and regulatory approval is relatively easy.Therefore,listed companies are more inclined to refinance by private placement,accounting for about 90%of all refinancing options.The most objects of private placement are large shareholders or institutional investors,and these investors are closely related to listed companies.Taking into account the interests of large shareholders and follow-up maintenance of institutional investors,listed companies need to provide appropriate exit opportunities for investors after private placement.When exploring the opportunity to withdraw,We found that many listed companies launched "high send and transfer" around the stock lock-up period.Although most of the profit sharing schemes are under the guise of "return shareholders",the coincidence of the lifting of the ban has to make people question whether there is some purpose in the "high send and transfer".The price of private placement is generally much lower than the market price,discount itself provide a sufficient objective condition for investor to sell shares after the completion of the private placement.Although the provisions of a year or three years restricted period partly restricted arbitrage,it will produce the risk of price below their issue price.When the lock expires,the sale of restricted shares into outstanding shares make investors can freely trade in the secondary market,listed companies have incentive to take action to raise stock prices.The article deeply studies this phenomenon,combined with the effect of market "high send and transfer",and based on the asymmetric information theory,principal-agent theory and dividend signal theory to study the directional relationship and "high send and transfer".The shareholding reduction when directed by limited sales lifted shares and listed companies adopt the dividend policy of "high send and transfer" are studied amply to verify "high send and transfer" may become a powerful tool for the issuance of shares investors cash escort.Using the fiscal year 2010-2016 listed companies on Shanghai and ShenzhenStock Exchange which new shares of private placementcan freely trade as a total sample.The propensity score matching(PSM)method was used to confirm the correlation between private placement and "high send and transfer".Then collecting data from these listed firms whichpublish stock dividends or transfer capital reserves to common shares and the rate of transfer per ten shares is above the median per year for further study.Therefor this article investing the effect of dividend announcements by utilizing event studies,and adopting multiple regression analysis method to study the probability of selling shares by investors.This study finds that,compared with listed companies that have not implemented SEO,private placement firms prefer to adopt "high send and transfer"about limited sale of shares recently.There is strong public reaction to the "high send and transfer" dividend policy in short-term,which may creat opportunities for investors trading stock in the market.It is also verify listed companies that implement Private Placement are more inclined to reduce shares by investors and higher "send and transfer"degree results in higher probability of selling.The paper reveals that the "high send and transfer" after Private Placement is the instrument by which some shareholders expropriate minority shareholders' interests.It is the mechanism that some investors can use this kind of dividend policy cumulative abnormal returns.The innovations of this paper are as follows:first,private placement and "high send and transfer"are combined to explore the correlation between the two.Different from the existing literature on individual private placement or "high send and transfer",this paper specifically for the "high send and transfer" phenomenon during private placement of restricted shares lifted,and focus on holding reduction in the secondary markets of the private placement investors after "high send and transfer"to reveal the interests mechanism behind of "high send and transfer" dividend policy after private placement.Second,compared with the existing literature from the perspective of managers'motivation,this paperfocused on studying dividend policy from investors' interests.From the private placement,private placement and the reduction of share holders,the behavior of "high send and transfer" has been redefined.Third,using propensity score matching method of study the relationship between "high send and transfer" and private placement,by using the propensity score matching method to reduce the endogenous influence on the conclusion of the study,it can reflect whether there is any relationship between them.