Research On The Reasons And Effects Of The Company's Multiple Modifications Of Convertible Bond's Conversion Price

Convertible corporate bonds are a new type of hybrid financing instruments,which not only have the nature of equity,debt and option,but also have many flexible terms.In the domestic capital market,convertible bonds started late,and they have higher requirements for the professional quality of issuers,so the overall development speed is slow.However,in 2017,driven by the New Refinancing Rules and credit purchase policy for convertible bonds,the convertible bond market ushered in the issuance climax.In order to further promote the practical application of the convertible bonds in domestic capital market,the paper adopts the method of case analysis and takes Beijing Blue Focus data technology co.,LTD as the research object,choose one of the numerous contract terms of the convertible bond-" special downward revisions of conversion price of convertible corporate bonds" clause to further analyze.The advertising agency industry as a whole is facing transformation and upgrading.Under the development strategy of merger and acquisition,the Blue Focus has obvious financing needs,and issuing convertible bonds is intended to achieve a new round of equity financing indirectly.In the context of strong conversion willingness,the Blue Focus' s ownership structure limited the scope of the first revision.Through the observation and analysis of the company's process of the three revision,the paper focused on exploring the event factors that directly led to it.Since only the third revision promoted the large-scale stock conversion,the market reaction of the first two was further analyzed by using the event study method,and the financial impact of multiple revisions on the issuer was analyzed from both positive and negative aspects.Finally,from the case study of the Blue Focus,we found the drawbacks of the revision clause of convertible bonds in the bear market environment.On the one hand,major shareholders can take advantage of their status to give priority to placement and then rapidly reduce their holdings.On the other hand,convertible bonds with high premium rate of stock conversion can be more likely to experience multiple revisions.Revise more frequently,resulting in the stock conversion price lower,the absolute value between the redemption trigger price and the market price was smaller,which meant that the investor's investment income was smaller.Through the above series of analysis,the paper put forward Suggestions on the downward revision of the capital market to share price terms from the perspective of issuers,investors and market regulators.