Research On The Motivation And Economic Consequences Of The Reduction Of The Shareholding Of Major Shareholders Of 37 Interactive Entertainment

Since the beginning of the era of full circulation in China’s capital market,the high returns obtained by major shareholders through the reduction of holdings have always been a hot topic in theoretical and practical circles.The reduction of holdings by major shareholders can not only adjust the company’s equity structure,but also improve the company’s overall investment decisions.The capital appreciation obtained by major shareholders by reducing their holdings has become an important means for major shareholders to make profits.As a company insider,major shareholders can achieve precise reduction of holdings through the advantage of information asymmetry and wantonly exploit the interests of small investors.In order to more effectively supervise the high level of major shareholders and ignore the regulations,the CSRC issued several regulations between 2015 and 2017 to control the chaos of major shareholders’ wanton reduction.However,the means of reducing the holdings of major shareholders have also become hidden with the relevant regulations on reducing their holdings,and the chaos of large shareholders arbitrarily reducing their holdings to obtain high profits has not been improved.Therefore,in the crazy surge of major shareholders reducing their holdings,how to effectively minimize the impact of major shareholders’ reduction behavior is still an urgent problem.This paper selects Wuhu 37 Interactive Entertainment as a case company,describes the process of wanton reduction of the Wu family under the guidance of information asymmetry theory,principal-agent theory and control income theory,and studies the motivation,reduction methods and economic consequences of the major shareholders of 37 Interactive Entertainment,and finally draws research conclusions and enlightenment.The research results show that the characteristics of the major shareholders of 37 Interactive Entertainment include signs of persistence,intensive reduction of holdings to transfer the holding position,delayed disclosure of illegal reductions,and the cooperation of multiple reduction methods,the specific motives include the use of shell resources to obtain huge profits,avoid business risks,inflated stock prices,and return of loans when pledges are due.In order to quickly complete the large-scale reduction of holdings and transfer of controlling positions,major shareholders have used a variety of methods to reduce their holdings,namely releasing performance signals to reduce their holdings at the opportunistic opportunity,additional employee stock ownership plans to push up the stock price to reduce their holdings,block trading and ETF swaps.This paper examines the impact of major shareholder reduction on capital markets,corporate governance and finance.It is believed that the reduction of holdings by major shareholders has had a serious impact on the economy of enterprises in the short term,causing negative market reactions and seriously damaging the rights and interests of small and medium-sized investors.In general,the intensive reduction of holdings by major shareholders ultimately has a negative impact in many aspects.Therefore,in order to curb the intensive reduction of large shareholders and protect the rights and interests of minority shareholders,this article makes suggestions from the perspective of the securities market,companies and minority shareholders.