The Causes And Economic Consequences Of The Struggle For Control Rights Between Institutional Investors And Founders

In the process of development and growth of enterprises will inevitably face capital chain problems,institutional investors with professional investment management,the characteristics of the portfolio structure and investment behavior,can provide funds to help the enterprises are facing financing difficulties.With the rapid development of our economy and the improvement of the capital market,the number of institutional investors increased rapidly and the scale is expanding constantly,plays an increasingly important role in the process of enterprise development.In principle,they do not participate in the operation and management of the investment target.However,recent years,companies such as NVC Lighting,Shanghai Jahwa,South Beauty and Vanke have fought for the control between founders and institutional investors.The frequent conflicts for control rights between institutional investors and founders have led to some thoughts on the scramble for control rights between institutional investors and founders.On June 26,2016,as Ping an Trust succeeded in acquiring a 47.7% stake in Auto House from Australia Telecom,the former largest shareholder of Auto House,the battle for control of the car House founder and institutional investor Ping an Trust finally ended.The result of the competition for control is that the founder is out,and the institutional investor takes over the management of the enterprise instead of the founder.Taking the Autohome as an example,this paper focuses on the scramble for control rights between institutional investors and enterprise founders.On the basis of combing and summarizing the relevant literatures and theories,this paper studies the causes and economic consequences of the contention for control rights.Based on the introduction of the case company,the relevant parties and the process of the control rights,the paper combines the specific situation of the control rights of the Autohome with the existing literature and theoretical research.This paper analyzes and summarizes the direct and indirect reasons for the contention for control of the Autohome.In the analysis of the economic consequences of the control rights competition,firstly,the stock price changes and stock trends before and after the control rights competition are analyzed,and the impact of the control rights contention on the stock price is analyzed directly and comprehensively.Using the event research method based on CAR and the eventresearch method based on BHAR to analyze the short-term market performance and long-term market performance of the control rights of automobile house.Finally,using the financial reporting data of the Autohome and the average value of Industry Enterprise performance Evaluation,using the method of financial performance evaluation,selecting several financial indicators to analyzes the financial performance of the company before and after the control over the Autohome from the four aspects of development capacity,profitability,operational capacity and solvency.Finally,the paper concludes: the introduction of external investors provides an opportunity for control rights competition;control rights competition will bring negative impact on corporate performance;institutional investors with rich resource advantages to obtain corporate control rights are conducive to the development of enterprises.The previous literatures on the economic consequences of the control rights struggle often based on the analysis of the market reaction and financial situation of the enterprises during the control rights struggle to explore the impact of the control rights competition.In this paper,the short-term event research method and the long-term event research method are combined with the control rights struggle,not only to analyze the enterprise performance during the enterprise control rights struggle,The paper also studies the performance of institutional investors who take control of enterprises from the founder,so as to evaluate the advantages and disadvantages of institutional investors taking over the control of enterprises on the development of enterprises.In addition,the Autohome is a typical representative of the entrepreneurial enterprises in our country.In the process of its development and expansion,it introduces external capital because of the financing problem,and finally causes the control right to fall down.The reasons for the struggle for control of Autohome,the problems exposed during the contention of control right and the related suggestions put forward by the paper can provide references for Chinese venture enterprises.This paper has some innovations in research methods and case selection.