Analysis Of The Reduction Of Major Shareholders Of OURPALM Co.,LTD

The Chinese securities market started very late.The concept of equity splitting was occurred due to the economic system.But different rights in the same share,which is the drawbacks affecting the liquidity of the securities market,has become increasingly serious with the development of the socialist market economy.Then the CSRC carried out the non-tradable share reform in 2005.Until 2008,China's stocks basically entered the era of full circulation,which caused the issue of reduction of major shareholders.Since 2015,the reduction of major shareholder has become more frequent,which has seriously affected the healthy development of the Chinese securities market.It is increasingly important to study the reduction behavior of major shareholders.Based on such economic background and academic background,this thesis mainly uses case analysis method,and correspondingly combines event research method,literature research method and financial analysis method,in order to explore the timing of major shareholders' reduction,motivations of major shareholders' reduction and the impact of reductions(including the impact on market,the company governance and public opinions,etc.).Therefore,the relevant opinions are expected to better improve relevant administrative regulations and better protect the interests of small and medium shareholders.The game industry,which is part of cultural industry,has been greatly developed and supported by Chinese government.And benefited from the demographic dividend and the development of science and technology,the game market has not been affected by the low growth economy,and the revenue of the game industry increase in a rapid pace every year.Benefiting from the rapid development of the industry environment,after listed in 2012,the market value of OURPALM has risen all the way,and also the stock price,except the period of the fall of the market in 2015.But from 2016,even though the company still have a good performance and its industry is still increasing rapidly,the major shareholder reduced their shares,and someone even left the company with the reduction.The company's share price has also fluctuated in a declining way,which deviated from the development of the game industry.Therefore,this thesis takes OURPALM as the research object,mainly using case analysis method,auxiliary event research method and financial analysis method to analyze the frequent reduction of the majority of major shareholders since 2016,and explore the deeper motivation of the majority shareholders,the timing and its consequences.Finally,this thesis brings up some suggestions for the reduction of shareholder behavior from three aspects: company governance,external supervision,and small and medium shareholders.The thesis presents that major shareholders have certain operational advantages in the choice of timing to reduce their shares,and they may create opportunities for reduction through earnings management.In addition,it also shows that regardless of the types of reduction,the market impact for major shareholders' reduction is a negative reaction.Although some positive events will have some impact,the overall is negative.