| In recent years,the incident of shareholding reduction by executives has aroused the concern of all walks of life,and shareholder shareholding reduction has become more and more frequent since 2006 to date.In response to the dramatic fluctuations in the securities market caused by the occurrence of this phenomenon,the shareholding reform and the company law have been continuously revised and improved,but this has also increased the opportunities for insiders of listed companies to reduce their holdings in the liquidity market to cash out.At the same time,insiders’ continuous reduction,liquidation reduction and concentrated reduction have sent negative messages to the market,making a large amount of capital flowing out from China’s stock market and accompanied by drastic fluctuations in share prices.YINHE Electronics,as a mega enterprise group with key components of new energy electric vehicles and multiple businesses such as special equipment and digital TV intelligent terminals,has repeatedly triggered media attention by insiders’ concentrated and group reduction after its listing,so it is representative and meaningful to explore insiders’ holding reduction behavior of YINHE Electronics.This paper finds that the major shareholders and executives of YINHE Electronics have a strong profit motive,and through a series of means such as mergers and acquisitions and transformation,they take the initiative to create hotspots to push up the share price and then reduce their holdings,the major shareholders have personal high capital leverage,poor confidence in the company’s prospects and the intention to transfer control and leave;other executive members choose to reduce their holdings for the purpose of risk avoidance when the business model changes,risks increase and profitability deteriorates.The analysis found that YINHE Electronics does not disclose information in a timely manner to create opportunities for them to reduce their holdings;close relatives of executives often choose to reduce their holdings during the collective reduction of executives to cash out and effectively avoid investment risks;institutional investors often reduce their holdings in advance for risk aversion purposes after the completion of their investment objectives.At the same time,this paper adopts the event study method combined with financial analysis method,and finds that the holding reduction behavior generally causes negative reactions from market investors,especially the negative market reactions of major shareholders’holding reduction are the strongest;secondly,the market reactions are stronger when executives’concentrated and large-scale holding reduction;in comparison,the market reactions triggered by the small-scale holding reduction of executives’ close relatives are not obvious.In addition,the reduction is often followed by a deterioration of the company’s financial performance,which affects the returns of small and medium-sized shareholders.Finally,based on the above findings,this paper concludes that China’s stock market should increase the intensity of information disclosure regulation of listed companies and further improve the shareholding reduction system,company management should continuously improve the governance structure to reduce the impact of insider shareholding reduction on minority shareholders,and outside investors should improve their ability to analyze investment risks in order to reduce the negative economic consequences of insider shareholding reduction.The insiders in China’s stock market take advantage of information asymmetry to reduce their holdings to the detriment of the interests of outside investors,and the study of the case company will hopefully further regulate the regulations on shareholding reduction to ensure that China’s stock market can run well. |
