Case Study On The Transfer Of Benefits From Michael

Private placement is one of the important means of equity refinancing of listed companies in China.As a financing method,it has a simple issuing procedure and flexible pricing,and there is no excessive demand for the company's profitability.Listed companies can solve financing problems,absorb high-quality assets,integrate resources,etc.through private placement,and the private placement has played a positive role in the rapid development of the company.However,China's private placements are developing late,and China's capital market is not sound enough.Many listed companies use the financing advantages of private placement to implement the benefit transfer.This not only does not promote the development of enterprises,but also gives small and medium shareholders.The interests have caused serious damage and hindered the healthy development of the capital market.In this paper,the case study method is used to study the interest transfer behavior in the private placement and the economic consequences of the benefit transfer,and the profit transfer problem in the process of the private placement of the wheat is revealed..The research shows that the way of this private placement of profit transfer is very diverse,including: the choice of pricing benchmark date,the timing of private placement,the earnings management before private placement,and the profit distribution after private placement.First,on the choice of the pricing base date,Michael finally chose to issue the lowest-priced board resolution announcement date.The choice of this date reduces the cost of major shareholders to subscribe for new shares,which is most beneficial for major shareholders;Michael achieved control over the issuance price of private placements by suspending trading at a favorable time.Thirdly,Michael had the suspicion of negative earnings management by inflating costs before the issuance.This will achieve the effect of suppressing stock prices.The ultimate goal of these means is to reduce the stock price of private placements,thereby saving huge shareholder subscription costs.Finally,after the completion of the private placement,the company continued to send high dividends to shareholders after the company's profitability was reduced and the amount of funds was insufficient.It was suspected that the major shareholders had the possibility of cashing out through high cash dividends..The profit transfer behavior in Michael's private placement also has certain economic consequences,including performance: causing the stock market to be sluggish and harming the interests of small and medium shareholders.In view of the way of the implementation of profit transfer and the economic consequences of profit transfer,this paper proposes relevant preventive measures,including:improving the pricing mechanism for private placement;strengthening information disclosure;regulating the profit distribution behavior of listed companies;establishing The protection mechanism for the interests of small and medium investors.Through the research of this case,the means and main economic consequences of the company's interest transmission are identified,and the relevant departments can carry out targeted regulation of relevant laws and regulations,thereby promoting the healthy and sustainable development of the capital market.In addition,the research can also create a framework for investors to identify interest transfer behavior,and better protect the interests of investors.