Study On The Motivation And Effect Of Tenglong Stock Repurchase

Share repurchases first appeared in foreign markets and then in China,so China is relatively late to the game In recent years,the stock repurchase has got a lot of the attention of the listed company,stock repurchase is more and more important,therefore,many scholars of stock repurchase in Chinese listed companies has case as the analysis object,an in-depth study,based on China’s listed companies to carry out an analysis of motive and effect of stock repurchase to enrich China’s stock repurchase theory knowledge,and guide Chinese The active implementation of listed companies has some positive practical significance for the development trend of stock repurchase in China.This paper selects Tenglong Stock as the case study object.Tenglong stock has developed rapidly in recent years,but its share price has fallen all the way recently,the company’s cash flow is not sufficient,and there is no lack of investment projects.Therefore,the announcement of share repurchase at this time makes people doubt its real motive.Therefore,this paper adopts case analysis,event study and other methods to make a detailed study of The share repurchase of Tenglong.First of all,the motivation of Tenglong shares is verified,and it is found that tenglong’s share repurchase is mainly to avoid the risk of equity pledge liquidation.On the one hand,from the perspective of market effect,through analysis,it is found that share repurchase has a certain positive market effect,but its positive effect is short-term and cannot be maintained for a long time.On the other hand,from the perspective of financial effect,through the analysis of the related indicators of capital structure,it is found that the implementation of share repurchase of Tenglong shares has a certain optimization effect on capital structure,but its adjustment is not appropriate,resulting in excessive debt ratio,increasing debt repayment pressure,and further increasing financial risks.Through the calculation and analysis of cash flow,profitability and growth indicators of Tenglong shares,it is found that share repurchase has a negative impact on the growth of the company.Finally,according to the above analysis,this paper draws relevant enlightenment and suggestions.From the perspective of the company,share repurchase motivated by opportunism will bring damage to the company and also bring certain financial risks.Therefore,it is suggested that the company should make stock repurchase based on the capital market and its own operating conditions,and improve the shareholder proposal system.From the perspective of external regulators,it is suggested to improve the relevant stock repurchase system to curb the occurrence of managers’ opportunistic behavior.From the perspective of investors,it is difficult for small and medium investors to identify the real motivation of corporate stock repurchase in the short term,so they should enhance their ability to analyze the information of stock repurchase.