A Study On The Motivation And Impact Of Guoxuan High-tech’s Major Shareholder Reduction

On April 29,2005,with the approval of the State Council,China Securities Regulatory Commission issued the notice on issues related to the pilot reform of non tradable shares of listed companies,and launched the pilot work of non tradable shares reform.With the smooth progress of the split share structure reform,many historical problems restricting the development of China’s capital market have been solved,and the prosperity and development of Daniu market and China’s capital market from 2005 to 2007 have been promoted.But with the solution of the old problems,new problems appear again.The lifting of the ban on restricted shares has gradually brought China’s capital market into the era of full circulation.The major shareholders of listed companies can not only obtain investment income through dividend,but also sell their shares of listed companies through secondary market reduction,so as to obtain more huge income.The lifting of the ban on restricted shares and the reduction of major shareholders’ holdings and sales have gradually become the norm,which has brought a lot of harm to listed companies and small and medium-sized investors,greatly undermining the stability of China’s capital market and limiting the healthy development of China’s capital market.In order to reduce the adverse effects of the reduction of large shareholders,China Securities Regulatory Commission has issued a number of regulations since 2017 to restrict the reduction of large shareholders.More and more attention has been paid to the reduction of large shareholders in listed companies.After analyzing many cases of large shareholder reduction,this paper takes two large shareholder reduction behaviors of Guoxuan High-tech Co.,Ltd.(hereinafter referred to as"Guoxuan High-tech")in 2016 and 2017 as typical cases to study the motivation and impact of Guoxuan High-tech large shareholder reduction.First of all,by consulting a large number of theoretical knowledge about the reduction of shareholders,combined with the research on the method of the reduction of large shareholders by scholars at home and abroad,this paper sums up and summarizes the reasons from the perspective of practical application,which provides a theoretical basis for the research on the motivation and impact of the reduction of shareholders of Guoxuan High-tech University.Then,the paper gives a detailed introduction of Guo Xuan’s large shareholders’reducing behavior,mainly including the company’s introduction,the background and relevant policies,the process and characteristics of large shareholders’reducing.Then,use the investigation method to analyze the motivation of Guo Xuan high tech’s shareholder reduction;use the comparative analysis method to compare the stock price trend,performance indicators and other related indexes of Guo Xuan high tech in recent years with the listed companies in the same industry,carry out the horizontal data comparative analysis,and analyze the impact of Guo Xuan high tech’s shareholder reduction according to the actual situation.Finally,this paper summarizes the case of Guo Xuan high tech major shareholder reduction,and the experience and lessons from it,which can provide reference for management supervision,listed company governance,small and medium-sized investors to invest.Through the study of Guo Xuan high tech major shareholders’ reduction,the following conclusions are drawn:(1)as insiders,major shareholders have information advantages.Compared with small and medium-sized investors,they can master more information about the operating performance and future development of listed companies.When the performance of listed companies is good and the stock price is high,they can choose the right time to carry out precise reduction and cash out,and obtain excess earnings.(2)The non controlling shareholders,mainly the second to the fifth largest shareholders,can only obtain the performance dividend of the listed company as the financial investor when they lack the control right of the listed company and cannot affect the operation decision of the listed company.When the stock price of the listed company is too high,they have stronger willingness to reducetheir holdings and cash out than the controlling shareholders.(3)The reduction of major shareholders in the case of good operating performance of listed companies may indicate that the future performance of listed companies will decline.Major shareholders are in their own interests.The purpose of reduction is to cash out at a high level and avoid the risk of decline in advance.(4)The stock price and market value of the listed company decrease caused by the reduction of non controlling shareholders,which will have a negative impact on the equity financing of the controlling shareholders and increase the risk of equity pledge.In serious cases,it will cause the controlling shareholders to lose the control of the listed company and affect the normal business activities of the listed company.Finally,through the research on the motivation and influence of Guo Xuan high tech’s large shareholder’s reduction,we can provide some enlightenment for us:(1)the regulators,mainly China Securities Regulatory Commission,should regulate and restrict the behavior of large shareholder’s reduction,improve the information disclosure system of large shareholder’s reduction,let the public know about the situation of large shareholder’s reduction,and improve the behavior of large shareholder’s reduction Bank restrictions,increase penalties for illegal reduction,and reduce the negative impact of large shareholder reduction on our capital market.(2)When the controlling shareholders of a listed company carry out equity financing,they should consider the negative impact of the reduction of major shareholders on the stock price of the listed company,carry out appropriate equity pledge financing according to their own actual development needs,select a reasonable financing pledge proportion and financing amount,and set up a financing warning line to track the stock price of the company.When the stock price of the company is lower than the warning line,the controlling shareholders can ensure that the collateral is added in time to avoid the stock pledge position explosion and the loss of the control right of the listed company.(3)Ordinary small and medium-sized investors,although lack of access to the internal information of listed companies,can take the reduction behavior of large shareholders as the basis for their own investment decisions.Small and medium-sized investors who hold shares can follow the reduction of large shareholders,choose to sell their shares to obtain excess profits;small and medium-sized investors who do not hold shares,try to avoid buying the shares of large shareholders to avoid Loss of investment.