Research On Motivation And Performance Of Chinese Concept Shares Returning

With the continuous improvement of China's capital market,the high valuation of A share market,the frequent malicious short-selling of many foreign institutions and the high cost of listing maintenance in some foreign countries,more and more Chinese concept shares have chosen to return to A share market.Especially in 2015,Chinese concept shares set off a wave of returning to A share market.Giant Network is a typical Internet company with game as its main business.When it went to the United States for listing,its market value was the first among Chinese private shares at that time.Since then,it successfully completed the privatization delisting in 2014,issued a backdoor listing announcement in October 2015,and returned to A share market smoothly in 2016.This paper chooses Giant Network as the research object to describe in detail the motivation and performance of Giant Network's delisting and returning to A share market on the basis of previous literature as well as the actual situation of Giant Network.Firstly,this paper deeply explores the motivation of Giant Network privation based on the background of China's stock privatization and delisting in recent years,as well as the motivation theory of privatization and corporate strategy theory.Secondly,this paper elaborates the three possible paths for the return of Chinese concept shares,and combs the advantages and disadvantages of the three paths in detail.Thirdly,this paper analyzes the performance of Giant network's backdoor listing.And it chooses event study method and financial index analysis method to compare and analyze the important financial indicators before and after Giant network's backdoor listing and draws a conclusion.Finally,on the basis of the previous paper,the paper puts forward some suggestions to improve the return of Chinese concept shares.The results of this study show that:(1)The main reasons for the privatization of giant networks are the undervaluation of stock prices,the reduction of the cost of maintaining listing,the expansion of financing channels,the corresponding domestic policy support and the avoidance of high risk of IPO listing.(2)Giant Network chooses the appropriate shell resources in the process of returning,the right time to privatize,rationally faces the risks in the process of returning,and reasonably sets the price of privatization,which improves the probability of successful returning.(3)After Giant Network returned to the A share market,a lot of new capital is injected into the market.In the short run,the stock price rises rapidly,and the cumulative yield of the secondary market reaches more than 100%.Thus,the Giant Network successfully gets rid of the situation of undervaluation.In the long run,Giant Network's profitability,solvency,operation ability and growth ability have been significantly improved,and it successfully achieves outstanding results.It is hoped that through the case of Giant Network's backdoor listing,this paper will provide appropriate practical support and theoretical reference for other Chinese stock companies that are ready or have begun to privatize,so as to make them rationally measure the advantages and disadvantages of domestic and foreign markets and rationally choose the return path.This paper also provides experience for the entry,exit and supervision of the domestic stock market,and promotes the reform and construction of relevant laws and regulations.