Study On The Motivation And Effect Of Equity Pledge Of Major Shareholders In Listed Companies

Equity pledge financing,as a new way of financing,is favored by financial institutions.Equity pledge can make the big shareholders of the listed company obtain the funds while guaranteeing the control.The situation has made this business grow rapidly,becoming the financing method used by 98% of listed companies.But with the increase of the equity pledge business,more and more problems are exposed.A lot of news about the fall in the share price of listed companies has led to the hitting of the flat appears in the public eye.In this context,the author puts forward the research appeal of this paper.In this paper,the author firstly sorts out the previous literature on the equity pledge,and puts forward the theoretical basis of the article.This part is divided into four parts.First,it defines the characteristics and concepts of major shareholders and equity pledge.Then put forward the research theory basis of the article.And it combs out the possible motivations and influences of the equity pledge of major shareholders of listed companies.Then analyzed using statistical analysis method,the content including the scale of the major shareholders of listed companies in China equity pledge present situation,the trend of loan-to-value ratio,the pledge of mark plate structure,such as pledge path distribution basic present situation.As well as solving financing problems,avoiding financing constraints and realizing leverage,we will explore the status quo of equity pledge.Next,we will use the gem listed company LETV as a case study of the large shareholder equity pledge financing of LETV.It is found that the motivation of the large shareholder Jia Yueting to pledge the stake in LETV is to empty the listed company.After using statistical S-W test and T test to compare the financial situation before and after the pledge,it found that it had a negative effect on the development ability of the company's profitability.After that,the event research method is used to observe the excess return and accumulated excess return rate of the equity pledge event,and find that the market has a positive attitude towards the equity pledge of the major shareholders of LETV network.And the major shareholders through the equity pledge to the financing and the interests of small and medium shareholders.Finally draw the conclusion: The equity pledge is neutral to the business itself.However,under the environment of imperfect legal regulation of equity pledge in our country,the particularity of equity pledge and the special status of major shareholders inthe company.These reasons lead to the shareholders' separation of control and cash flow rights after the pledge of shares held by the shareholders,which increases the motivation of major shareholders to infringe upon the company and the minority shareholders.Therefore,the paper puts forward the suggestion of establishing and improving the laws and regulations of equity pledge and improving the information disclosure system of equity pledge.