How The Negative Information Of Subsidiary Influence The Market Reaction And Goodwill Of The Listed Company

There have been five M&A waves in the history of the United States.Through the M & A waves in the history of the United States,it can be found that M & A is often closely related to the economic cycle.When the enterprise has a better judgment on the future economic situation,the enterprise will try to expand its market share through M&A or try to diversify,in order to achieve cost reduction or seek scale effects.When companies judge that the economic situation is positive,companies will try to increase market share or try diversified operations to reduce costs and seek economies of scale.Since the acquisition of Yanzhong Industrial by Shenzhen Baoan on September 30,1993 has opened the prelude to mergers and acquisitions of Chinese listed companies,China's economy has maintained rapid growth,and corporate mergers and acquisitions have also been taking place.Since 2015,the number of mergers and acquisitions of listed companies in China has increased significantly.This shows that with the prosperity and development of China's capital market,more and more listed companies hope to achieve scale expansion and product deepening through mergers and acquisitions,so as to enhance the company's competitiveness and maximize profits.The lack of understanding of the merged company and management often leads to many hidden dangers in mergers and acquisitions of listed companies.Observing many companies,we can also find that the impairment of goodwill often begins to occur within one or two years after the completion of mergers and acquisitions.At the same time,it is accompanied by a huge amount of goodwill impairment confirmation.After the financial data is released,it will once again hit investors' confidence.In this regard,this article adopts a combination of theory and cases,taking the theory of effective market theory,information asymmetry theory,the motivation and risk of high premium mergers and acquisitions,and the recognition and impact of goodwill impairment as the theoretical basis of this article.Yitong Century was selected as the research object,and three comparable companies in the same industry as Yitong Century were selected.The event research method was used to study the three major negative news disclosed by Yitong Century after it merged with Beitai Health.At the same time,this article also examines the basis of the goodwill formed by the merger and acquisition,so that the company's huge goodwill impairment analysis after the disclosure of negative information is consistent.In addition,this paper chose another company——Lakala,which were also listed on Shenzhen Stock Exchange and affected by the negative information caught by the subsidiary of its associated company.Also through the comparison of event research method,this paper finds that compared with Yitong century,Lakala's market reaction on the day of negative information exposure and the trading day after that is more significant than that of Yitong century.This paper also discusses the dislocation of stock price and goodwill in describing the negative information of listed companies.The innovation of this paper lies in:(1)The negative information of listed companies' subsidiaries was affected by the event research method,rather than the how the listed companies pure negative information affected listed companies.This article has Certain innovation.(2)This article introduces in detail the basis of the merger and acquisition and the formation of goodwill,so that the subsequent negative information can confirm the impairment of goodwill to a certain degree of continuity.To a certain degree of warning effect.(3)This paper not only selects the comparable companies in the same industry in Yitong century,but also selects Lakala,a listed company with the similar negative information.It analyzes the dislocation of the description when the negative information of the listed company caused by goodwill and market reaction from different perspectives.