Research On The Motives And Impact Of East Money’s Continuous Issuance Of Convertible Bond Financing

Financing management is a very important part of enterprise financial management.Convertible bonds are the product of financial market,which integrates the three characteristics of debt,equity and convertibility.In order to meet different enterprises’ financing needs,convertible bonds came into being.Since 2017,with the gradual improvement of relevant policies and regulations,the convertible bond market has entered a stage of rapid development,and more and more enterprises have begun to pay attention to this new financial instrument.With the increasing position of convertible bond in the refinancing market,the research on this modern financial instrument has certain theoretical and practical significance.However,there are still some problems in the convertible bonds.Because of the lack of understanding of this financing tool,after some listed companies issued convertible bonds,the companies not only failed to give play to the financing advantages,but also intensified the company’s financial pressure.In China,there are few companies that issue convertible bonds twice,and even fewer that issue convertible bonds three times.As a GEM listed company that has successfully issued convertible bonds for three consecutive times,East Money has certain representativeness and research value.This article uses the method of case study to analyze the motivation and economic effect that East Money’s continuous issue convertible bond for financing.Firstly,by summarizing relevant literature,the article focuses on the literature about convertible bonds’ issuing motivation and economic effect,the theoretical basis,and the basic concept of convertible bonds.Secondly,this article analyzes Chinese convertible bond market’s current situation by centering on the development process and the existing problems,and study East Money’s issuing terms of the three convertible bonds.Thirdly,from the perspectives of external motivation and internal motivation,it explores the motivation of East Money’s continuous issuance of convertible bond financing.Finally,using the event study method and ratio analysis method,this article studies the shortterm market reaction,financing cost and financing risk,financial performance and the impact on shareholders’ equity of East Money’s continuous issuance of convertible bonds.This article draws the following conclusions.Firstly,Convertible bond was a suitable financing method for East Money at that time.Secondly,East Money has successfully issued convertible bonds to reduce the cost of issuance and financing risk.Thirdly,East Money’s convertible bond financing’s negative effect is lower than that of equity financing,and the negative effect gradually weakens with the continuous issuance of convertible bonds.Finally,the company’s income structure and profit model have been optimized,and its growth ability,profitability and value-creating ability have been enhanced.The research provides a case reference for the brokerage industry to issue convertible bonds and carry out its capital operation strategy.