Research On Motivation And Effect Of Focus Media's Returning Back To A-share Market

All along,China's securities market has always adhered to a strict listing approval system.In the middle of the past two decades,in the face of relatively high market entry thresholds and immature capital markets,Chinese companies that failed to achieve domestic listings have gone overseas to seek development.The US capital market is well-known for its solid financial strength and maturity.The environment has won the favor of many Chinese companies,and most of them choose to go public in the United States,which are called China Concept Stocks.In recent years,with the constant improvement of China's capital market,and foreign markets are filled with many unfavorable factors for Chinese companies,a large number of Chinese companies have embarked on the road to privatization due to the restriction of overseas development.Based on principal-agent theory,corporate valuation theory,evasion supervision theory and equity financing theory,this paper uses normative research,case studies and other methods to sort out the characteristics of the establishment and dismantling of VIE structures in China Concept Stocks.Selecting Focus Media as a case study object,this paper analyzes the motivation,facing risks and countermeasures of Focus Media's return to listing,and summarizes the effect of Focus Media's return to listing after a comparative analysis.Finally,this paper refines some suggestions to the companies that intend to return to the A-share market and the improvement of China's capital market.Through a systematic analysis of Focus Media's classic cases,it clearly shows that Focus Media's return to the A-share market is the result of both internal and external factors.In order to reverse the undervalued market value,reduce the cost of listing and maintenance,and improve the efficiency of financing,the company has chosen to return under the promotion of national policies.During the time,Focus Media is facing capital risk,legal litigation risk,and re-listing risk.However,with careful planning and flexible adjustment,the company broke through the risk bondage with the help of external organizations and its own advantages,and eventually returned to A-share market successfully.The case study of this article explains to a certain extent the phenomenon of the regression of China's stocks.It provides some inspiration and lessons for Chinese companies that intend to return or are returning to take risks and respond to risks,and also helps China's capital market better.Relevant issues concerning the return of general stocks and the diversification of capital markets to provide reference suggestions.