The Choice Of Company's Equity Financing Market

Since the listing requirements of China's securities market are strict,many newly established companies go to raise money abroad while they can't raise capital on Chinese stock market.With the increasing number of China concept stock,the drawbacks of overseas listing are also increasingly exposed.Due to the lack understanding of the regulatory environment of overseas markets,some enterprises have been short-listed by overseas institutions because of irregularities,which also affects other China concept stocks.With the continuous improvement of the domestic market and the lack of high-quality listed companies,a small number of enterprises with good performance are sought after by investors,and their valuations are higher than those of overseas enterprises.All these factors attract the return of overseas China concept stock.The return of China concept stock also once set off a boom,Qihoo360 is one of the typical representatives.Qihoo360,as the largest Internet enterprise returning to China,has achieved both fame and wealth.Qihoo360 return to China,not only gained great attention,but also doubled its market value after backdoor listing.As Qihoo360 is the largest company return to Chinese stock market in recent years,therefore its privatization and backdoor listing are worth to discuss.By studying the process of Qihoo360's overseas listing to return to China's securities market,it is conducive to providing reference for other listed companies and those who want to go abroad.According to the case study of Qihoo 360,this paper finds the following conclusions: firstly,valuation differences in different markets have a direct impact on choice of firm's listing location,but shareholders need to grasp the market opportunity when valuation differences arise;Secondly,the case shows that return has a positive impact on Qihoo 360's performance,but Qihoo 360's return time is relatively short,there is no evidence shows that return will contribute to Qihoo 360's long-term performance;In addition,the return of Qihoo 360 also shows that the domestic policy has a good guiding role in attracting high-quality China Concept Stock return,the improvement of the domestic market and the support of qualified high-quality enterprises are the important factors for Qihoo 360 to return;Finally,there are some risks in the return of Qihoo 360,Qihoo 360's market value is too large,it has to mortgage for reducing financing costs,therefore the main shareholders may lost its control on Qihoo 360 when they break their promise.Finally,based on the case study of Qihoo360 backdoor listing,this paper puts forward some enlightenment and suggestions from three perspectives of enterprises,investors and regulators.Firstly,enterprises should weigh the costs and benefits of overseas listing before deciding whether to go abroad;secondly,for China Concept Stocks,they should not blindly follow the trend and choose privatization,because the return process is long and policy changes have a great impact on the success or failure of the return;finally,regulators should strengthen institutional construction to avoid speculative Enterprises returning to A shares,while strengthening supervision and maintaining the market stability.