Empirical Analysis On Connections Between Lockup Expiration Of Shares As For Private Placement And Abnormal Return On Stock Investment

Private placement,also known as targeted additional shares issuance,frequently applied to listed companies.As a market-oriented tools,private placement has some advantages such as low cost of issue,quick audit procedures and smooth progress compared to other means of refinancing.Therefore,the volume of private placement grows increasingly.The market size of it was about 1.58 trillion yuan in 2016 with a year-on-year growth of 16.18%,reaching a record high.Due to the feature of discounted issuing,with that increasing growth,private placement could put pressure on stock market after limited sale period,exerting influence not only on certain stock but also the whole market.For this reason,lockup expiration of shares as for private placement.For the lack of research on this prospective,it is worth studying.This dissertation will mainly center around effect of private placement on certain stocks before and after the expiration day,based on the data during Jan.2017 to Dec2017.Through studying on significance of change of returns during window period of shares lockup expiration and comparison different window period,we put forward the hypotheses in the first place.Then,we add independent variables such as PE,PB,ratio of lockup expiration shares,ratio of financial investment,whether strong stock holder or not and total market value to regression analysis for hypothesis verification.On the whole,lockup expiration of shares as for private placement tends to affect return on certain stock investment negatively.Besides,media hype and psychological expectation of investors would also add fuel to the fire.With the growing volume of private placement,the overall market will be affected increasingly.Therefore,new regulations in regard to private placement and reducing unlock holding-shares comes out in good time.While subsequent effectiveness remains to be seen,this article will offer some related advice for enhancing Chinese stock market steadily based on the studying.