Research On The Motivation And Financial Effect Of Guangbo Stock Repurchase

Stock repurchase originated from the U.S.capital market.In the 1970 s,due to the turbulence of the U.S.stock market at that time,the government strictly controlled the cash dividend policy of listed companies.As a "substitute" of cash dividend,stock repurchase became popular in the capital market.A large number of stock repurchase drove the share price of companies up and boosted the confidence of the capital market.In recent years,with the continuous improvement of China’s capital market,listed companies gradually realize the value of stock repurchase.In recent years,China’s stock market continues to be depressed,and the stock price deviates from the real value of the company.A large number of listed companies implement stock repurchase to boost the stock price,and the relevant national departments have also issued policies to encourage stock repurchase.The number of repurchase companies increased rapidly in 2018,and the repurchase amount continued to rise.Generally speaking,stock repurchase is an indicator of the abundant capital of listed companies.After investors accept the signal,they will often enhance their confidence in the company and push the company’s share price up.It is also to see the positive effect of stock repurchase,some companies announced repurchase plans,but in the process of implementation,there was a big discount or even no action,"deceptive repurchase" phenomenon emerge in endlessly.This paper takes the stock repurchase event of Guangbo Group Co.,Ltd.in 2018 as the research object,from the perspective of repurchase motivation and financial effect,and combined with the macro market background,uses case study method,literature research method,event research method,etc.to deeply analyze the stock repurchase behavior of Guangbo Group Co.,Ltd.On the one hand,this paper combs the stock repurchase event of Guangbo and verifies the motivation disclosed in the announcement,and finds that the motivation of the company’s disclosure is inconsistent with the actual situation;on the other hand,this paper uses the financial flexibility hypothesis,manager opportunism hypothesis,combined with the relevant data disclosed by the company,and finds that the potential motivation of the stock repurchase of Guangbo is to increase financial flexibility and help big investors Shareholders create arbitrage conditions to prevent large shareholders’ pledge equity from being forced to close positions.Then this paper uses the event study method and comparative analysis method to analyze the financial effect of Guangbo stock repurchase.Using the event study method,it is found that the cumulative excess return rate in the window period of the plan is basically negative,which indicates that the market is not positive about the repurchase,and the rise of the company’s share price is very limited;through the vertical comparison of the financial indicators of Guangbo in various years and the horizontal comparison among industries,it is found that after the completion of the stock repurchase,the company’s financial indicators have not significantly improved,and the short-term effect is obvious The solvency and profitability are still declining.Finally,this paper draws the case enlightenment from the company and the management.For the company,it is necessary to face up to the impact of stock repurchase on stock price and financial performance,and formulate a reasonable repurchase plan according to the actual operation of the company;and the regulatory authorities should control the qualification of repurchase subject,strengthen the requirements of information disclosure,increase punishment,reduce the information asymmetry of large shareholders and small shareholders,and safeguard the interests of investors.