Analysis Of Longyu Fuels Company Stock Repurchase Motivation

Stock repurchase refers to the use of their own funds or financing funds by listed companies to buy back a certain amount of stocks issued by the company from the stock market,so that the stocks that are circulated outside the company are reduced,and the stock price is increased or used for equity incentives.It first appeared in Western capitalist countries.Compared with the West,stock repurchase started late in China,but with the continuous development and improvement of China’s capital market,listed companies have begun to notice the stock repurchase capital instrument in recent years.Especially in the past three years,hundreds of listed companies have implemented stock repurchases almost every year.Therefore,studying the motives and programs of stock repurchases of listed companies in China will help enterprises and government supervision departments to make better use of this tool.This paper mainly uses the case study method,selects the stock repurchase of Shanghai Longyu Fuels Co.,Ltd.as the object of case study,and takes the stock repurchase motivation and stock repurchase scheme design as the entry point,and carries out the case of Longyu Fuels stock repurchase.First of all,after reading a lot of domestic and foreign literatures,this paper sorts out the research background,research significance and related research viewpoints of stock repurchases by domestic and foreign scholars.Then,it explains the related concepts and related theories,focuses on the current mainstream stock repurchase motive hypothesis and introduces the unique development process of stock repurchase under China’s national conditions.Then,on the basis of fully introducing the background of Longyu Fuels Company and related financial policies,it reviewed the Longyu fuel stock repurchase event,and then carried out a profound analysis of the stock repurchase motive,and discovered this through the event research method.Stock repurchase has caused a positive announcement effect.Several aspects of the design of stock repurchase programs were analyzed.Finally,the paper summarizes the research of the full text.The motive of this Longyu Fuels stock repurchase is not only the officially announced adjustment of the company’s registered capital,raising the level of earnings per share,but also passing the undervalued signal to the outside world to boost the stock price and reduce the shareholder tax burden.To prevent managers from over-investing,etc.,to a certain extent,it has stabilized the stock price,which in turn saved investors’ confidence.The last part puts forward corresponding countermeasures and suggestions for the problems found in the stock repurchase research.