Research On The Motivation And Effect Of Stock Repurchase Of Listed Companise

Since 2018,China’s capital market has continued to slump,and many listed companies’ stock prices have fallen more than 50%.In the case of irrational fluctuations in the capital market and continued sluggishness,repurchase has become a major means for listed companies to stock prices.In order to safeguard the interests of the majority of shareholders,the positive signal of the company’s development prospects is passed,which prompts the company’s stock price to return to a reasonable level.Many listed companies have launched repurchase plans.And on October 26,2018,the Standing Committee of the National People’s Congress passed the decision on the special amendment of stock repurchase in the "Company Law",which increased the repurchase situation and simplified the repurchase process;at the same time,the CSRC also announced The announcement of "Regulating and Supporting the Repurchase of Listed Companies by Law" has made the stock repurchase supported by the law and the support of the regulatory authorities.In many repurchase plans,it is necessary to clarify the real motivation of the listed company’s repurchase plan,and different drivers will have different effects.Based on the purpose of this research,this article takes the Midea group stock repurchase as an example to analyze the motives and the effect of the Midea group stock repurchase.Through analysis,the motivations of Midea Group are as follows: 1.The management is optimistic about the future development of the company due to its internal information,trying to transmit signals to the market and stabilize the stock price;2.Implementing the equity incentive plan and eliminating the dilution effect on the earnings per share and the shareholding ratio of shareholders;3.In order to cushion the stock price down which caused by lifting restricted shares;4.Cooperate with major asset restructuring that share swap absorb the merger of Little Swan.Judging from the effect of repurchase,the repurchase of the financial indicators such as earnings per share of the Midea group has a positive effect,and the repurchase announcement has brought a certain stimulating effect to the stock price of Midea Group,but this effect is short-term,the continuous announcement has a more pronounced and strong effect on the stock price.I hope that through the case analysis,it can help investors better identify the motives of listed companies’ repurchase and help listed companies to deepen their understanding of stock repurchase.