Research On The Impact Of Equity Pledge Of BOCO Controlling Shareholders On The Company's Performance

In recent years,the equity pledge has been favored by the controlling shareholders of listed companies in China because of its advantages of convenient pledge procedures,fast financing,and flexible financing scale.However,we cannot ignore the shortcomings of the equity pledge behavior.First,the financing amount is the amount after the market value discount of the pledged shares,and its capital cost is high.Second,it is easy for listed companies to trigger the liquidation line and even the company will embark on the road of being “ST”.China's capital market is not mature,and laws and regulations are not perfect.In recent years,the growth rate of equity pledges is higher than that of listed companies with pledge behavior;At the same time,because the listed company's equity price is relatively volatile in the capital market,this great volatility is very easy to strike out the liquidation and liquidity risks;Therefore,there is a huge risk behind the pledge of controlling shareholders of listed companies in China.Studying the controlling shareholder's encroachment behavior and the impact of equity pledge on the performance of listed companies will be very valuable.This paper firstly sorts out related literatures on equity pledge risk,interest encroachment brought by equity pledge and equity pledge affecting company performance.Then,select BOCO as the case study object,and take the controlling shareholder equity pledge financing incident as the entry point,introduce the company's equity pledge related situation.Analyze the basic financial situation of BOCO and the way in which equity pledge affects the company's performance.Preliminary hypothesis of the relationship between the equity pledge of BOCO and the company's performance.then,the effects of equity pledge on the company's stock price,financial performance and other company performance indicators were studied by event analysis and time series analysis.At last,According to the results of the research,the impact of equity pledge on the company's financial performance and the pledge of equity pledge affect the company's financial performance.The research results show that: First,when the controlling shareholder pledges a large amount of equity,the personal interest will often take precedence,which will infringe the interests of the minority shareholders.Second,although the equity pledge will have a positive effect in the short-term market reaction,the overall economic consequences and market performance are not very ideal.Third,according to the unary quadratic regression model,we can see that the controlling shareholder's equity pledge and the company's financial performance show an "inverted U—type" relationship.Finally,In response to the analysis of the current situation of BOCO,the countermeasures for the operation of BOCO.At the same time,it also provides suggestions for other listed companies and relevant regulatory authorities.Mainly from the internal governance of the company and strengthen the intensity of external supervision,etc.,in order to provide reference for listed companies.