A Case Study On The Shareholding Reduction Of The OURPALM Co.Ltd's Largest Shareholder

According to Wind data statistics,from January 1,2018 to June 30,2018,all A-share listed companies had 2,346 executive reductions,and the earnings of the reductions were 33.477 billion yuan.The number of reductions in Growth Enterprise Market(GEM)was 971,and the earnings were as high as 7.773 billion yuan.At present in the domestic capital market,the reduction of executives and the reduction of major shareholder holdings are widespread,which may not only be detrimental to the long-term development of the company,but also detrimental to the healthy and stable development of capital market.This paper selects the OURPALM's largest shareholder's reduction behavior as case study's object,Using literature research method,event research method and financial index analysis method,etc.to analyze the motives,the characteristics and the consequences of the OURPALM's largest shareholder's reduction behavior,and summarizing some expence about the company's efforts to strengthen governance,the government to strengthen supervision and protection of small and medium investors can learn from.Therefore,this case study has certain theoretical and practical significance for the research on the motives,reduction characteristics and impact of the largest shareholder's reduction behavior.Firstly,this paper sorts out the majority shareholder's reductions process,and combines the development of the OURPALM in recent years to analyze the motivation of the majority shareholder Yao Wenbin's reduction.Secondly,the paper analyzes the process of the majority shareholder's reduction process and then summarizes its characteristics.And this paper analyzes the short-term market effects through the event research method which caused by Yao Wenbin's several reductions.Besides,the paper also analyzes the gains from the largest shareholder's reduction and the impact on the company's stability caused by the substantial reduction movement.Finally,based on the results of the analysis,the paper summarizes the enlightenment on corporate governance and draws revelations on government regulation.According to the above case study,the following conclusions are drawn:(1)The analysis shows that the motivation for the reduction is mainly due to the majority shareholder have insufficient confidence in the company's future and the market value are also overestimated which goes a bad way.(2)The timing of the reduction movements are close to the disclosure of the performance report,performance forecast and quarterly report,etc.and the reduction method mainly adopts the large-scale transactions which can stabilize the stock price and be secret.In addition,the announcement of the majority shareholders' reduction is lagging and its content is very brief.(3)The results show that the short-term market effect is negative overall.During the period,the CAR which is calculated after the announcement is less than the previous one.(4)In terms of the largest shareholder's reduction revenue,the results through cost-benefit calculations show that Yao Wenbin has achieved high returns through a series of reductions,with a return on investment of 650.83%.(5)And the resignation of company's largest shareholder which turns out have a negative impact on the company's short-term stability.(6)Strengthening the company's internal control,improving the operational integration capability and establishing a reasonable employee incentive mechanism to enlighten the corporate governance.Strengthening the information disclosure mechanisms and strengthening the protection of the minority investors to improve the government regulation.