A Study On The Motivation And Economic Consequences Of The Reduction Of Major Shareholders Of Z Company

After the split share structure reform in 2005,China's stock market has officially entered a new stage of full circulation.With the gradual release of stocks listed,large shareholders began to reduce their own shares.There is nothing wrong with the major shareholders to reduce their own shares appropriately in accordance with laws and regulations.However,in the wave of reduction of their holdings,there are frequent phenomena of major shareholders reducing their holdings to give up their control rights and reducing their holdings to decentralize their shares.This not only has a serious impact on the company,and it's not good for the healthy development of the stock market.In 2017,the China Securities Regulatory Commission(CSRC)issued a number of rules and regulations on regulating the behavior of listed companies' major shareholders and directors and supervisors in reducing their holdings,however,the phenomenon of large shareholders reducing their holdings for various reasons is still emerging in endlessly.Therefore,in order to standardize the behavior of the large shareholders,it is very important to study the motivation and the economic consequence of the reduction.Based on the relevant theories of shareholder reduction,such as Information asymmetry theory,signal transmission theory and corporate governance theory,this paper chooses company Z as a concrete case company,and chooses the behavior of large shareholder Yao Wenbin as the research object,in-depth analysis of major shareholders Yao Wenbin's reduction of motivation and reduction of economic consequences.Through analysis,it is found that the motivation of majority shareholder Yao Wenbin's reduction of holdings is complicated.Besides the motivation of individual cash-out,it also includes the purpose of strategic reduction of holdings based on the company's Development,namely the introduction of a strategic partner,Nyingchi tencent,to promote employee stock ownership plans and send positive signals to the market.As for the economic consequences of underholding,we can find that the market reaction is different because of the different motives.As for the individual arbitrage motivation,the market has a significant negative reaction,while the strategic underweight behavior can cause a short-term positive reaction in the market,although in the long run,the market reaction still turns negative in the end,but the positive feedback from the market can not be ignored.At the same time,the reduction of holdings caused stock prices to fall,making the interests of small and medium-sized shareholders severely damaged.Finally,it summarizes the enlightenment brought by the behavior of reducing holdings.Through the research on the causes and economic consequences of the reduction of large shareholders in Z company,this paper will bring some enlightenment to the company,the shareholders and the market supervision,and provide some reference for reasonably regulating the reduction of large shareholders' shares,meanwhile it is expected to provide some reference for the study of the motivation and economic consequences of the reduction of large shareholders in similar companies.