A Case Study Of Share Repurchase Under The Background Of Share Pledge By Controlling Shareholders Of Zangger Company

Under the background that the economy is turning to high-quality development,the uncertainty of external environment is increasing and financing is difficult,equity pledge has become an important financing method.If the controlling shareholders of the listed company pledge their shares and the share price continues to fall to the closing position,the listed company may face the risk of control transfer.Therefore,the case study of share repurchase under the background of the controlling shareholders’ share pledge has important theoretical and practical significance.Tibet Mining Co.,Ltd.(stock code: 000408)carried out share buybacks by means of centralized bidding under the extreme situation that the controlling shareholders and their concerted actors had their shares pledged in full and the abnormal fluctuation of share price generated the risk of transfer of control,effectively raising the share price in a short period of time and avoiding the risk of liquidation by pledge.Therefore,this paper takes Zangger Company as the main body of the case,hoping to provide useful reference for listed companies and regulators.First of all,based on the action events and the basic situation of the listed companies,it is speculated that the main reason for their repurchase is to stabilize the stock price and avoid the risk of liquidation by pledge.Secondly,the economic consequences of share buybacks are analyzed.The financial effects are analyzed by the ratio method,the market reaction is analyzed by the event research method and the stock price performance,and the performance of enterprise value indicators is analyzed by calculating Tobin Q value and economic added value.It is found that the share buybacks have a positive impact on Zangger Company’s financial effects,market reaction and enterprise value indicators as a whole.Finally,it evaluates the motivation,plan and economic consequences of the buyback case,and summarizes the beneficial experience and shortcomings of Zangger Company’s share buyback.Through the research in this paper,it is concluded that share repurchase can mitigate the risk of control transfer,produce good financial and market effects,and improve corporate value index.Put forward suggestions to the case company on improving the governance structure and strengthening the risk control;The share buyback to listed companies should be based on their own financial situation,focus on the development of the company’s core business,and be honest with small and medium-sized investors.It is suggested to the regulatory authorities that the disclosure standard of controlling shareholders’ equity pledge should be improved and the monitoring of the whole process of share repurchase should be strengthened.