Research On The Motivation And Financial Effect Of A Company's Stock Repurchase

Stock repurchase originated in the United States and has a history of more than 20 years in China.However,due to the economic particularity of China and the support of relevant policies,it has been widely welcomed by listed companies in China in recent years.Generally speaking,stock repurchases convey good news to investors,but due to the fact that China 's policies and laws on stock repurchases are not yet perfect,and there is information between capital shareholders and small and medium shareholders in China 's capital market information The unequal situation has given some "impure" companies an opportunity.This paper mainly uses the literature research method,theoretical induction method and case study method.The main reason for choosing A in this article is that it has carried out three stock repurchases in just two years.The large amount of repurchase funds and the frequency of repurchase times have allowed the author to repurchase A company stocks.Has doubts about its true motivation.In the follow-up,the author conducted a comparative analysis of the stock repurchasing behavior of Company A's three phases,and found several points worth paying attention to: First,except for the first phase,the stock repurchase behavior of Company A's stocks was the company's major shareholder Mr.Yu initiated the initiative;secondly,the term of the three-phase repurchase plan was extended one by one,and from the perspective of the degree of completion of the plan,only a third of the plan was completed for the third time,reflecting the tightness of the company 's capital flow from the side.Based on the above phenomenon,this article uses the method of motivation verification to investigate the announcement motivation and hidden motivation of company A's stock repurchase,and finds that there are largely managerial opportunistic motivations: First,the controlling shareholder of company A uses stock repurchase to cancel The risk of own stock pledge;the second is that the major shareholders of company A use share repurchases to reduce their shareholding profits.This article analyzes the relevant data of the announcement time and implementation period of company A's stock repurchase from two aspects: event research method and performance research method.According to the event research method to study the stock price impact of the company's stock repurchase announcement,from the relevant data in the plan window period,it can be found that the market is not positive for the company A's stock repurchase behavior;In terms of performance,it was found that Company A 's financial indicators during this period reflected a situation that was not optimistic.It can be seen that Company A 's stock repurchases during this period not only had no good news,but also caused the company to face payment risks and financial risk issues.This also reinforces the demonstration that Company A 's stock repurchase,which is driven by managerial opportunism,has not received positive feedback from the market,and it has had more obvious side effects on the company 's production and operation activities.Finally,this article puts forward the enlightenment I have obtained based on the analysis and conclusion of the case.First,stock repurchases based on managerial opportunism will cause damage to the company;second,if the company wants to carry out stock repurchases,it should draw up a reasonable stock plan based on the capital market and its own operating conditions;then,it should be from within the company Together with the external supervision,it suppresses the opportunism of managers in stock repurchases.Finally,because small and medium shareholders do not have as much information as the major shareholders of the company,they should have certain analysis when they conduct information such as stock repurchases.Ability to protect their own rights.