Research On Motivation And Market Effect Of Increasing And Holding Stocks With Lowest Price Allowance

In July 2015,when the stock market was flooding,most listed companies in A-shares could not escape the fate of a sharp drop in the stock price.At this time,a new type of overweight holding was particularly noticeable,that is increasing and holding stocks with lowest price allowance.The so-called increasing and holding stocks with lowest price allowance is that a initiative from the company's major shareholder or chairman of the company's to the company's employees to increase stocks,and promised that if employees hold until the lock up expired and in-service,there is a loss made by the boss to make up the difference,while the profits are owned by employees.The majority of shareholders who make up for their employees' losses were once praised as "China's Good Boss." The price of stocks of a number of companies has thus risen continuously.From the beginning to the present,the topic of holdings has always been a topic,which is not only closely related to the sensitivity of the proponent's own major shareholder status,but also related to his particular background and form.First of all,in the capital market of our country,the behavior of the major shareholders of listed companies has always been the focus of attention in the academic community,and the essence of the publicly held holdings announcement is an initiative of the company's controlling shareholder to issue an increased shareholding in the company's employees to the company's employees.This matter originally was not necessary to issue an announcement.However,for some purposes,the company voluntarily disclosed it.Second,the market background of outburst concentration of outbursts was the motive of announcements and timing choices after the stock price slump.It is worth thinking deeply.In addition,among the listed companies that have increasing and holding stocks with lowest price allowance,some people are happy to see some people worry.Some companies' share prices have risensteadily,while others have not stopped the decline and eventually fell below the reserve price.What caused this contrast? This is also one of the issues that this article wants to explore.In the cases study,this article selected two listed companies that had announced increasing and holding stocks with lowest price allowance in 2015,namely,Jingui Silver Industry and Qtone Education Group.The price trend of the two companies in the back pocket was at two extremes.Through the collection and comparison of data,this paper takes the effective market hypothesis as the theoretical basis,and conducts a case study on the entire process of the motivation and effect of the two listed companies' holdings of publicly held stocks until the expiration of the lock-up period.AR is the main measure indicator to evaluate the short-term market effect of increasing and holding stocks with lowest price allowance.Then,based on the signal transmission hypothesis and the incentive compatibility principle,a guess is given to the motives of pocket-sized holdings by analyzing the actual situation of the case companies.Through comparative analysis,the main reasons for the difference in the stock price of the two listed companies were explored.Through case analysis,the following conclusions are drawn: Firstly,the increasing and holding stocks with lowest price allowance announcements have a stable stock price and motivation to motivate employees.The basis for this is mainly the special time background of the announcement and the high percentage of equity pledges and their disclosure from various aspects.The willingness to bundle employee and company interests;secondly,the overweight holding announcement has a significant positive market effect on the short-term excess returns of the company's individual stocks;and third,the long-term effect of the overweight holding announcements is not significant.The main influencing factors that caused the lock-up to expire are the macro market factors,medium-term industry factors and micro-company factors.According to the cases study of this article,the author has given suggestions from differentperspectives: From the perspective of the regulatory agency,it is necessary to strengthen the legislative norm of overtaking behavior and maintain the normal market order;from the perspective of the company,it should be In combination with its own situation,reasonable use of increasing and holding stocks with lowest price allowance,conscientiously follow the market order,and it better play its positive role;from an investor's point of view,it should not blindly follow the trend and should be rationally analyzed.,and make investment decisions.