Research On The Reasons And Countermeasure Of The Share Breakage Of Millet Group

Since the large-scale break-up of new shares on the first day of China's A-share market in 2010,the break-up of new shares has become one of the most concerned topics in China's securities market,especially the three highs of GEM:high issuing price,high P/E ratio and high fund-raising.The phenomenon of IPO break-up breaks the myth that investors can obtain high returns through "breaking new" in the primary market,and brings new challenges to the healthy development of China's securities market.If the price of new stock issuance is too high,especially during the period when the IPO breaks out in a large number of concentrated,investors will reduce their subscriptions.In the case of high IPO offering price,investors will hesitate to invest in new shares because of their knowledge of high break-out risk,and may even cause too little purchase of new shares,so as to make the issuance of new shares fail.Moreover,if the IPO price is too high and new shares break out on the first day,it will reduce investors'confidence and lead to a further decline in the new share price.This has a negative impact on the company's future financing activities,the establishment of a good image and its growth in the stock market.Starting from the case of new shares breaking on the first day of millet's listing,firstly,by referring to domestic and foreign literature and relevant theories,the paper combines the process of millet group's listing with it,and secondly,it further analyses the causes of new shares breaking on the first day after millet group's listing.From the perspective of industry and self-positioning,millet group is an Internet enterprise,and has a high P/E ratio,but its income mainly comes from mobile phone sales revenue,so the market questioned its positioning;from the financial situation,millet group's financial situation is generally good,but from the cash flow point of view,millet group's "burning money mode" will affect its market.Expectations;From the corporate governance perspective,millet group is the first company with different rights in the same share.This equity structure helps to protect the equity interests of the starters,but may encroach on the effective rights and interests of other shareholders.The new share issuance system is analyzed from the aspects of issue price and earnings ratio.The decline of millet group's valuation shows that there are certain problems in its valuation.The price-earnings ratio is too high for its industry;the disclosure of IPO information shows that the millet group did not disclose the serious environmental impact of its suppliers in time before listing;the external investor sentiment,due to the Sino-US trade war and the devaluation of the RMB,the whole capital market is depressed,and has a negative attitude towards the listed investors of the millet group.Finally,the relevant suggestions for China's securities market are as follows:to strengthen the supervision of sponsor agencies to ensure the maximum interests of all stakeholders;to improve the management structure of enterprises themselves,while protecting the interests of founders,without harming the rights of small and medium shareholders;to strengthen the disclosure of IPO information,pay attention to the details of information disclosure;to increase the right of small and medium investors to issue new shares.This will not only protect the interests of small and medium-sized investors,but also help enterprises to make good management decisions.Finally,the relevant suggestions for China's securities market are as follows:to strengthen the supervision of sponsor agencies to ensure the maximum interests of all stakeholders;to improve the management structure of enterprises themselves,while protecting the interests of founders,without harming the rights of small and medium shareholders;to strengthen the disclosure of IPO information,pay attention to the details of information disclosure;to increase the right of small and medium investors to issue new shares.This will not only protect the interests of small and medium-sized investors,but also help enterprises to make good management decisions.