Research On The Economic Consequences Of Private Placement Of GEM Listed Companies

As the booster of the main board market,the risk and return of gem are higher than that of the main board market.Cro enterprises listed on the gem generally seek development by means of merger and reorganization and strong combination.Due to the large scale and high frequency of raising funds,they often face greater refinancing risks than ordinary enterprises.Private placement refinancing stands out with the advantages of less restrictions and large financing scale,and has become one of the popular financing means in the GEM market.However,since the CSRC revised the refinancing policy and increased the control of the fixed growth market in 2017,the private placement on the gem was once cooled.Until 2020,the CSRC issued new refinancing regulations and introduced a series of measures conducive to the private placement of companies listed on the gem.The way of private placement is popular again in the gem.However,the deregulation of the policy can not guarantee the good implementation effect of private placement.Based on this,this paper selects tiger medicine,a cro listed on the gem,as a case to analyze the motivation and economic consequences of its choice of private placement.On the one hand,it strengthens investors’ understanding of private placement.On the other hand,it also provides an example for other GEM companies to formulate private placement plans and implement private placement.Through case analysis,it is found that tiger pharmaceutical has adopted private placement twice in a row in order to obtain financial support to optimize business layout and promote the development strategy of strong alliance;The two private placements of tiger medicine had a positive announcement effect,in which the market performance of the second private placement was released in advance;After private placement,the overall financial performance of the company is good,the ownership structure in non-financial performance is optimized,the industrial chain is extended,and the long-term development strategy is significantly promoted.Based on the case of tiger medicine,this paper believes that the matching of private placement plan and the company’s development strategy can play a more positive effect;The market reaction of private placement on GEM is greatly affected by the financing time interval,the type of issuance object and the change of financing policy.In this regard,this paper suggests that listed companies should pay attention to market and policy changes to avoid being divorced from policies and affecting the implementation of private placement;When formulating the private placement plan,we should select the appropriate issuance object in combination with the company’s future development objectives;For the funds raised by private placement,we should formulate a reasonable fund use plan,pay attention to the return of shareholders and prevent the risk of dilution of immediate income;Where assets are injected into private placement,they shall be reasonably valued to prevent the risk of goodwill impairment.The regulatory authorities should strengthen the prior audit and supervision of private placement of companies listed on the gem,ensure long-term supervision afterwards,and maintain the benign development of the GEM market.