Study On The Motivation And Consequences Of The Reduction Of Major Shareholders Of Jebsen Shares

Since the CSRC launched the reform of equity splitting,the shares of listed companies can be freely traded in the secondary market.Due to the limited regular dividends,shareholders no longer rely solely on the shares they hold for dividend distribution.After the ban on restricted shares is lifted,shareholders will sell their shares,and most shareholders will sell their shares through block transactions to reduce their holdings.The behavior of major shareholders to reduce their holdings occurs frequently,and even in order to cash out malicious reductions,most of the investment behavior is motivated by speculation.As a major shareholder of the company’s insider,the major shareholder enjoys the advantage of information,and when it perceives that the company has risks or poor management,it will reduce its own risk by reducing its holdings.China’s laws and regulations on the reduction of major shareholders are not perfect,and the reduction of major shareholders may produce negative market reactions,which is not conducive to the long-term stable development of the company.Taking Jebsen Shares as an example,this thesis further analyzes the motivation and consequences of the reduction of major shareholders of Jebsen Shares on the basis of the literature research method and case analysis method,and puts forward corresponding suggestions.The major shareholders of Jebsen Shares began to reduce their holdings in 2016 and reduced their holdings several times in 2016-2020,and the company’s shareholding structure has gradually diversified.This article first introduces the basic situation of Jebsen shares,including the company’s profile and the shareholding structure before and after the reduction,and sorts out the reduction of jebsen shares’ major shareholders.Secondly,this article analyzes the motivation for the reduction of holdings,although many announcements of the reduction claim that for the development of the company,the proceeds of the reduction will be provided to the company in the form of interest-free loans,repay the pledge to reduce the risk of the company,etc.,but the major shareholders will usually obtain high returns in the form of reductions for different reasons,and there is a motivation to cash out.The main reasons for the reduction of jebsen’s major shareholders mainly include hedging market risks,the company’s declining performance leading to a lack of optimism about the prospects,its own capital needs,lax supervision and insufficient penalties to make the major shareholders not strictly constrained.After that,this article focuses on the consequences of the reduction of major shareholders from three aspects: market reaction,corporate governance,and the rights and interests of minority shareholders.The frequent reduction of holdings by major shareholders has led to a continuous decline in the company’s stock price,resulting in a negative market effect,while the resignation of the company’s managers has increased,the level of information disclosure has declined,and the company’s image has been negatively affected,which has seriously affected corporate governance and infringed on the rights and interests of small and medium-sized shareholders.Finally,this article makes some of the corresponding recommendations.In order to reduce the malicious reduction of major shareholders,measures should be taken from many aspects,not only to improve the regulatory mechanism and increase the intensity of punishment,but also to improve the corporate governance structure,as well as to improve the risk awareness of small and medium-sized shareholders,and gradually regulate the reduction of major shareholders.