Research On The Impact Of The Implementation Of Dual-Class Share Structure Of Internet Enterprises On The Interests Of Small And Medium-Sized Investors

When designing the equity structure of enterprises,the traditional corporate governance theory takes the effective balance of control rights and cash flow rights as the core idea.Therefore,China has always adopted the equity structure model of equal shares and equal rights.However,as China’s capital market gradually entered the stage of high-quality development,in March 2019,the Securities Regulatory Commission officially promulgated the Shanghai Stock Exchange Science and Technology Innovation Board Stock Listing Rules,in which the "Voting Rights Difference Arrangement" section clearly stipulated the principles and contents to be followed by issuers to issue shares with special voting rights,indicating that the dual equity structure has been legalized and developed in China’s capital market.Admittedly,the dual equity structure can solve the contradiction between equity financing and control dilution,and is widely favored by emerging Internet technology companies by virtue of this significant advantage.The introduction of this special equity structure will greatly enhance the inclusiveness and vitality of China’s capital market.However,at the same time,the dual equity structure breaks the balance of control and cash flow rights,and provides convenience for the founding shareholders to infringe the interests of small and medium-sized investors in the enterprise.In addition,the research on the dual equity structure in China started relatively late,and the protection system for the interests of small and medium-sized investors under the differential arrangement of voting rights is not perfect,which is easy to cause concerns and doubts in the capital market.The majority of small and medium-sized investors also have many doubts about it,which seriously affects investment enthusiasm.Therefore,scientifically understanding the "double-edged sword" role of dual equity structure and putting forward countermeasures and suggestions to avoid the risks brought by dual equity structure to the realization of the interests of small and medium-sized investors have become the core topic discussed in this paper.First of all,this paper combs the domestic and foreign literature and finds out that the impact of dual equity structure on the interests of small and medium-sized investors has strong research value and constructs a research framework based on relevant classical theories for this research direction.Then,comprehensively considering factors such as the typicality of the case,the listing time,the availability of data and so on,JD.com Group is selected as the case study object,mainly using the indicator analysis method,the comparative analysis method and the event study method to comprehensively analyze the positive and negative impact of JD’s implementation of the dual equity structure on the interests of small and medium-sized investors from multiple perspectives such as the setting of control rights,the change of enterprise value,and the encroachment of the founding shareholders.It also explores the reasons why JD’s implementation of the dual equity structure has a negative impact on the interests of small and medium-sized investors: the huge investment in self-built logistics,the rapid expansion of new business,the unreasonable distribution of value,and the lack of self-discipline of the founder.Finally,from the three perspectives of legal norms,corporate governance and information disclosure,this paper puts forward countermeasures and suggestions to effectively avoid the risks brought by the dual equity structure to the interests of small and medium-sized investors,including establishing the position of the plaintiff’s chief representative of the investor protection institution,forcing the addition of the "Sunset Clause",and strengthening attention and disclosure of abnormal behaviors of founding shareholders.The expected contribution of this paper is to expand the research depth of this research field by adding novel perspectives such as the comparison of control settings,the analysis of founding shareholder encroachment indicators and the comparative analysis of the market reaction of the Mingzhou incident of JD.com founder Liu Qiangdong and the divorce incident of Amazon CEO Bezos.In addition,this paper provides some new ideas for improving the interest protection system of small and medium-sized investors under the arrangement of differential voting rights and promoting the long-term healthy development of the capital market in China through the proposal of countermeasures and suggestions.