The Research On The Motivation And Performance Of Backdoor Listing Of Giant Network

With the rapid development of Chinese Internet industry,companies like BATJ all chose to list and finance.However,Chinese capital market had a late start and still remains to be developed.It's still lack of some rules,regulations and laws.So it's hard for Chinese Internet companies to reach the threshold of listing in mainland.Moreover,there are several problems in capital market caused by authorization system of issuance of shares,such as listing qualifications are scarce,listing cycle is long and IPO needs to be waited for a long time.The Internet companies which are up tp the listing standards can't bear the time cost.Therefore,Chinese Internet companies prefer to list in overseas capital market.A lot of Chinese companies chose to privatize and delist because of the influence of shorting by Muddy Waters & Citron since 2010.Most of the companies choose to go back to mainland capital market and list for financing after privatization.Generally speaking,IPO and backdoor listing are the two main routes of listing in mainland capital market.IPO has a high standard and it takes a long time.Internet companies can't reach the standard at the beginning of development.It's adverse to the rapid development of Internet companies.Backdoor listing can lower the threshold and shorten the waiting time.It can meet the companies' demand and support with strong financial backing in time.In addition,the government proposed to call the Internet companies back by CDR,but it's not suitable for all companies.So the article chooses to study the issue of Giant Network backdoor listing.It hopes to help the other Chinese Internet companies which plan to list in mainland.Giant Network backdoor listing is selected as the case of this article.On the basis of relative theories,the article analyses the motivations and post-performance of Giant Network backdoor listing.Based on a large amount of literatures,the article introduces the concepts,motivations,performance evaluation methods and related theoretical basis of backdoor listing.Then it analyses the financial and non-financial performance of backdoor listing with related indicators.Finally,it gives conclusions and enlightentments.In the beginning,the article introduces the background and significance of choosing backdoor listing as the research direction and expounds the ideas and methods of this article.In the part of theory overview,the article puts forward the concepts,motivations,performance evaluation methods and four theoretical basis of backdoorlisting.In the part of case analysis,the article introduces the basic situation of Giant Network.Then it elaborates the whole process of Giant Network backdoor listing and puts forward the motivations,including the imperative demand of capital for new strategy,implementing overall strategy transition,great differences of cross-market evaluation and avoiding the risk of IPO.In the part of performance analysis,the article selects critical financial data within five years before and after Giant Network backdoor listing from 2013 to 2017.Meanwhile,it analyses the market effects via the fluctuation of its stock price after backdoor listing.In addition,the article analyses the non-financial performance after its backdoor listing.At the end of the article,several conclusions are drawn as following.Vigorously developing of the main business is the fundamental purpose of Giant Network backdoor listing,and it got good market effect and financial benefit.Backdoor listing strongly supported the globalization and resources integration with capital of Giant Network.The VAM restrainted backdoor listing of Giant Network.The founder of Giant Network played an pivotal role in the reformation and backdoor listing of the company.Finally,the article gives some advices for Chinese Internet companies which listed overseas and plan to list in mainland,such as having an exact aim of backdoor listing,guiding and encouraging backdoor listing in mainland properly,restrainting behaviors of backdoor listing with VAM,being prudent about the choice of timing of backdoor listing according state policies and the companies' development situation.