Share Repurchase Of Listed Companies: Signaling Or Opportunism?

As an important financial instrument,share repurchase first emerged in the western capital market and started relatively late in China.In recent years,with the continuous improvement of China's capital market,share repurchase has gradually attracted the attention of China's listed companies and investors.As for the motivation of share repurchase,there are mainly two views: signaling motivation and opportunistic motivation.The signal transfer motive is to convey the signal that the company's stock price is undervalued,and the opportunistic motive is to issue the share repurchase announcement for its own special purpose.The opportunistic motives of share repurchase not only hurt the interests of small and medium-sized investors,but also seriously disrupted the order of the capital market.To help investors to better identify the company's share buybacks real motives,build a more orderly market,by analyzing the case of Hai Lanxin in share buybacks to set up the analysis frame of identification of share repurchase behavior real motives: based on the financial situation,action events,the capital market behavior,and respectively from the perspective of signal transmission and opportunism of case company share repurchase motivations for identification.Based on the financial situation,the case company is analyzed from the aspects of capital status,solvency,operating status and profitability to judge whether it has the strength and qualification to carry out share repurchase.Based on the action events,this part mainly analyzes the major events before and after the announcement of the share repurchase of Hai Lanxin to determine whether there are events closely related to the share repurchase;Based on the behavior of the capital market,on the one hand,it can judge whether the stock price of Hai Lanxin is undervalued and whether it has realized its opportunistic purpose through the change of stock price.On the other hand,through the analysis of trading volume,it can judge whether the investors in the market can timely identify the real motivation of share repurchase of listed companies.Through the identification framework,it is concluded that: it is hard to convince that the motivation of share repurchase is used to convey positive signals to the market and investors,and the opportunistic motivation of share repurchase by its natural person's major shareholder to avoid the equity pledge liquidation risk is more powerful.Combined with the market reaction and financial effect after repurchase,it is found that share repurchase can produce significant positive market effect in the short term,indicating that small and medium-sized investors in the capital market can hardly identify the real motivation of share repurchase of listed companies in a timely manner in the short term.After the buyback,the financial situation of Hai Lanxin did not show a good trend,which is contrary to the signal transmission motive claimed by Hai Lanxin,further verifying that there is an opportunistic motive in the share buyback of Hai Lanxin.Through the analysis of the whole case,on the one hand,it is hoped that the policy of share repurchase in China can be more perfect,and stricter applicable conditions can be formulated for the share repurchase "necessary for the maintenance of company value and shareholders' rights and interests",and the possible opportunistic behaviors can be more strictly restricted from multiple dimensions.On the other hand,it provides a reference for investors to identify the real motivation of share repurchase of listed companies,and helps minority shareholders to conduct stock investment more independently and rationally and reduce investment risks.