Analysis On Financing Motivation And Economic Consequences Of Letv's Shareholder's Equity Pledge

Since the reform and opening up,especially in the past ten years,China's economy has developed rapidly and its financing channels have become more and more diversified.The financing of equity pledge has gradually attracted the attention of all parties.The convenience of equity pledge financing makes the controlling shareholder keen to obtain the capital flow through this channel.However,the separation of the controlling shareholder's right of control and the right of cash flow in the process of equity pledge also leads to the bad motivation of the controlling shareholder's equity pledge.It affects the development of listed companies and the interests of other relevant parties.Therefore,based on the information asymmetry theory,the separation of control and cash flow rights theory and the signal transmission theory,this paper studies the motivation and economic consequences of holding shareholders 'financing by means of equity pledge.It has the value and significance of practical research on how to avoid the negative impact of shareholder equity pledge financing on various stakeholders.Based on the behavior of the equity pledge of the controlling shareholder,this paper analyzes the motivation of the financing of the equity pledge of the controlling shareholder of LeTV Network and its adverse effects on all parties concerned,and puts forward some reasonable suggestions on how to reduce the adverse effects.Firstly,this paper expounds the background and significance of the research,and reviews and comments on the relevant literature from the perspective of the motivation and risk of the major shareholder's equity pledge.Secondly,this paper introduces the relevant concepts and theoretical foundation,and analyzes the present situation and existing problems of China's equity pledge in detail;Thirdly,this paper introduces the equity pledge of the controlling shareholder of LeTV Network,and analyzes the motivation and economic consequences of Leshikonggu's shareholder's equity pledge.Finally,according to the case analysis,the conclusions of the study are drawn and the relevant recommendations are put forward.Through the study of the case of LeTV,and combining with the situation of the stock pledge of listed companies in China,the following two main points of inspiration are drawn:(1)Due to the separation of the right of control and the right of cash flow after the pledge of equity,The controlling shareholders have bad motives such as using the equity pledge to cash out and transfer the shares in disguise.(2)Although the holding shareholder's equity pledge itself belongs to the individual financing behavior of the shareholders,because the controlling shareholder has an important influence on the listed company,a large number of defaults on the trading of the holding shareholder's equity pledge will directly lead to the deterioration of the listed company's operations,resulting in adverse economic consequences.Damaging the value of the company and the interests of shareholders and pledged creditors.