The Financing Effect Of Company That Finances Through Private Placement In New OTC Market

Since the reform and opening up,although small and medium-sized enterprises have developed rapidly,there are also widespread problems of financing difficulties and high financing costs.This problem has long plagued the growth and development of small and medium-sized enterprises in China.As the core platform to support the financing development of small and medium-sized enterprises in China,The New OTC Market is called the "midfield" of the capital market and shoulders the historical task of serving small and medium-sized enterprises under the new situation of high-quality economic development.According to the official data of the New OTC Market,as of December 28,2018,there were 10,691 enterprises listed on the New OTC Market in China.In the whole year of 2018,the total amount of financing completed in the New OTC Market reached 60.443 billion yuan.which provided a large amount of financial support for the development of small and medium-sized enterprises.In terms of theoretical significance,this paper chooses a negative case of inefficient fixed-income financing in the New OTC Market to conduct a comprehensive analysis of the case company's operating data,governance structure and other aspects using a variety of methods,perspectives and indicators,which is a further development and supplement to the existing relevant research methods.In terms of practical significance,the inefficiency of fixed increase financing in the New OTC Market is a common problem.Through in-depth analysis of the specific reasons for the inefficiency of fixed-increase financing of case companies,this paper summarizes the experience and lessons of failure,which can be used for reference and reference for the management of enterprises and policy-making to solve this problem.In the case study of this paper,it is difficult,key and important to use various methods to analyze data scientifically.Based on the data changes and operation of several directional issuance of case companies,this paper makes a detailed and in-depth analysis of stock price changes,excess returns,long-term performance effects and corporate governance structure before and after the implementation of directional issuance of case companies by means of financial performance index analysis method,Tobin Q-value-based enterprise value analysis method and EVA-based enterprise performance analysis method.Through research,this paper finds that the case company has obtained a large amount of liquidity in several directional issuance,which makes up for the urgent need of insufficient daily operating funds such as wages,water andelectricity rent,but has not used most of the funds to innovate and develop products and technologies.Driven by short-term positive excess return and Tobin Q value greater than 1 and industry average,the short-term arbitrage intention is obvious.From the long-term performance point of view,the corporate governance structure of the case company has not been improved after the implementation of directional issuance.The profitability,operation ability,solvency and growth ability of the company have not been actually improved,and some of the capacity indicators still have a significant downward trend.Although it created short-term wealth for shareholders at the beginning of listing,with the passage of time,the investment value of the company did not increase with the increase of the number of additional issuance,shareholders' wealth was decreasing sharply,and the development situation of the company was deteriorating.The market participation is low,investors' expectations of additional issuance are not high,and the effect of fixed additional issuance of case companies tends to be negative.Through further research,this paper draws the conclusion that the effect of private placement financing is closely related to the purpose of private placement financing,corporate governance structure,management,operation and innovation of enterprises.The financing efficiency of fixed incremental behavior with long-term purpose is relatively high.If the enterprise has strong ability of management and innovation,the efficiency of fixed-increase financing will be relatively high.In the process of the implementation of fixed-increase financing,a good governance structure encourages stakeholders to cooperate actively in order to create benefits,which is conducive to promoting the stable development of enterprises in the process of implementation of fixed-increase financing.On the contrary,once there are problems in corporate governance,the competition for interests and control power will easily lead to the lack of continuity or even decision-making errors in enterprise decision-making,which will affect the stable development of enterprises,and then lead to the inefficiency of enterprise financing.