Major Shareholds' Stock Pledge,investor Sentiment And Stock Price Crash Risk

Since the launch of the pledge of shares-based buyback business in 2013,China has set off a boom of "share pledge-based buyback transactions".It has gradually become an important tool to solve corporate financing.However,share pledge has not only solved the temporary shortage of funds for major shareholders,but also brought many problems.In recent years,listed companies and securities firms have been involved in disputes over share pledge repo business,which is only the tip of the iceberg.A large number of major shareholders of listed companies in our country have a dominant position in the company,and the pledge of stock rights enables major shareholders to cash in through pledge of stock rights while possessing the original company power.Once the company fails to effectively improve the company's performance after equity pledge,the separation of control rights and cash flow rights may cause major shareholders to give up their equity and empty the company,causing stock price to fluctuate greatly or even collapse,damaging the rights of small and medium shareholders.Therefore,equity pledge not only has an impact on securities dealers,but also is closely related to the interests of the majority of small and medium-sized investors.Based on the current situation of equity pledge in China,this paper attempts to analyze the impact of major shareholders on the risk of stock price collapse and the role of investor sentiment.Firstly,this paper reviews the relevant data of equity pledge,risk of stock price collapse and investor sentiment.Secondly,according to relevant theories such as information asymmetry and investor sentiment,this paper analyzes the relationship between the pledge of major shareholders' equity and the risk of stock price collapse and the impact of investor sentiment on the relationship between the two,and puts forward the relevant assumptions of this paper with reference to literature review.Then,based on the relevant data of listed companies from 2011 to 2017,this paper empirically studies the relationship between the major shareholder equity pledge and the risk of stock price collapse,and further discusses the role of investor sentiment in the equity pledge and stock price collapse,and draws the conclusion of this paper.Finally,some suggestions are put forward according to the conclusion.This paper studies the relationship between the major shareholder equity pledge and the risk of stock price collapse in listed companies,and discusses its influence on therelationship between the major shareholder equity pledge and stock price collapse from the perspective of investor sentiment.The main research results and suggestions are as follows:(1)There is a significant positive correlation between the equity pledge of major shareholders of listed companies and the risk of stock price collapse,that is,the equity pledge of major shareholders will increase the risk of stock price collapse of listed companies.And the greater the ratio of equity pledge,the higher the risk of stock price plummeting.This shows that the pledge of shareholders' equity may lead to the transfer of assets and damage the rights and interests of minority shareholders.In order to avoid these speculations by major shareholders,the government should strengthen the supervision of the equity pledge market and issue corresponding policies to manage it.And to strengthen the protection of small and medium-sized investors,improve the level of investor protection.(2)Investor sentiment can alleviate the positive correlation between the pledge of major shareholders' equity and the risk of stock price collapse,and inhibit the risk of stock price collapse.The better the investor's mood,the more he can restrain the risk of stock price collapse caused by equity pledge.Listed companies can improve investors' confidence in the company by timely understanding investors' emotions and disclosing the company's information to investors,thus reducing the risk of stock price collapse.Financial institutions can also predict the trend and fluctuation of stock prices by paying more attention to investors' emotions,so as to know the situation in time and take corresponding measures.The research in this paper provides a reference for stabilizing the company's stock price and has certain significance for the stable and healthy development of China's capital market.