High Ratio Stock Dividends After Private Placement:Increased Valuation Or Manipulation To Cater?

Private placement is an important refinancing method in China."High ratio stock dividends" is a dividend policy for listed companies that convert stocks or capital reserves into share capital.Although "high ratio stock dividends" is only an adjustment between the corporate's internal equity accounts,but was highly sought after by investors,becoming a hot spot in the capital market.In recent years,some companies have announced a stock transfer plan before or after the ban period of private placement.The share price has risen,and institutional investors participating in the private placement have received a transfer premium.But the question is,why do companies surrender premiums to institutional investors? Is the "high ratio stock dividends" under a private placement is a normal valuation boosting tool or a tool for benefit delivery?In order to explore the real motivation of the "high ratio stock dividends" behavior under the private placement of Tronly New Electronic Materials,this article uses the theory of financing pecking order,dividend catering and other theories as the theoretical basis for this article.At the same time,the relevant literature is summarized,and the motivation of “high ratio stock dividends”after the private placement is analyzed around the two perspectives of valuation enhancement and manipulation and catering.After carrying out the above work,this article finds that the first "high ratio stock dividends" of Tronly New Electronic Materials is a normal means of market value management,and the second "high ratio stock dividends" is a price game and exchange of benefits between enterprises and institutional investors.The company completed the second “private placement + high ratio stock dividends” through a strict layout,playing with the new diversified routine of reduction of holdings,which led to the overall deterioration of operating conditions.Based on the above research results,this article puts forward suggestions such as formulating a profit distribution plan that matches performance,improving corporate governance and equity incentive plans,improving related legal mechanisms,being vigilant about new types of stock exchanges for ETF reduction,and establishing a small and medium investor appeal mechanism.