The Effect Of Private Placement On The Stock Price Of China's Listed Companies

Since the issuance of the "Measures for the Management of Issuance of Listed Companies' Securities" in 2006,more and more listed companies have begun to choose to issue such refinancing methods.In addition,since the establishment of the SME Board in 2004,it has gradually developed into an important part of China's multi-level capital market.It is of great significance to specifically study the effect of private placement on the stock price of small and medium-sized listed companies.This article refers to the comparison of existing research results at home and abroad,and puts forward three hypotheses:(1)When the target of private placement contains major shareholders and their related parties,the cumulative abnormal return in the short-term is greater than the target of private placement only for institutional investors.(2)The higher is the issuance discount rate of private placement,the lower the abnormal return is;(3)The long-term impact of the private placement on the stock price is weaker than the short-term effect.In order to test whether these three assumptions are true,this article draws on some of the research methods of the predecessors and adopts the event research method to list 281 small and medium-sized boards with private placements from January 1,2009 to December 31,2014.The company conducted the calculation of the abnormal return rate and the significance test in various window periods.Then,a multivariate regression model was established to select a total of six variables for the prediction of abnormal return rate.Among them,the abnormal return rate was divided into short-term abnormal return rate CAR and long-term abnormal return rate BHAR,and they were observed respectively.The empirical test results show that the private placement has a "declarative effect"on the short-term stock price of listed companies in China's small and medium-sized boards,and it is the most significant one week before the announcement date.This shows that there is information leakage in the Chinese market.In addition,when the subject of targeted private placement is the major shareholder and its related parties,the cumulative abnormal return rate in the short term will be greater than when the private placement target is only institutional investors and natural persons.This proves that the hypothesis 1 in this paper is true.The issuance discount rate of targeted private placements does significantly affect the abnormal return rate,and the higher the issuance discount rate,the lower the abnormal return rate.This proves that the hypothesis 2 of this paper is true.The long-term effect of private placement on stock prices is not significant.Hypothesis 3 of this paper has been verified.Based on the above conclusions,this paper proposes to:Improve the auditing mechanism for private placements,strengthen the disclosure of information,and severely punish violations of insider trading.We will standardize the pricing mechanism for private placements,increase supervision of project progress after the completion of private placement and fund raising,and promptly disclose it to investors.