The Analysis On The Motivation And Effect Of Suning’s Stock Repurchase

As a new capital operation mode of listed companies produced in 1950 s,stock repurchase has a history of 30 years in Chinese capital market.In the past 30 years,with the continuous improvement of the financial institution,stock repurchase gradually adapted to Chinese capital market.Since the issuance of new policies to relax restrictions on stock repurchase in 2008,stock repurchase has gradually become a common capital operation mode of listed companies in Chinese capital market.Especially in 2021,the number of companies that issues stock repurchase has reached more than 1,000 in China,which significantly promotes the development of Chinese capital market.This paper takes the first three successful stock repurchases and the last termination of stock repurchase of Suning from 2018 to 2021 as the research object,and analyzes the repurchase motivation of the four stock repurchases,the financial impact on the company and the market effect by combing the financial and operating states of Suning.Through case analysis and empirical analysis,the repurchase motivation of the purpose that Suning sends a positive signal to the outside world is to improve the stock price,the repurchase motivation of equity incentive in stock repurchase announcement,and the motivation of adjusting capital structure in the first three stock repurchases are obtained.Through the comparative analysis of financial indicators before and after repurchase,it can be found that the financial effect of stock repurchase is dual.And further using event analysis,it can be found that stock repurchase announcement can bring excess returns to companies’ stock in the short term.In addition,by comparing the closing price at the end of the month before and after the implementation of the repurchase,it can be found that the first two repurchases have achieved the purpose of raising the stock price,but the third stock repurchase has lost its role in raising the stock price under the impact of the COVID-19 on offline stores.Compared with the previous three times,the fourth stock repurchase ends in failure due to the lack of liquidity funds and debt crisis of the company.According to the research findings,this paper takes the case of Suning stock repurchase as the foundation,and puts forward the theoretical direction and policy suggestions from the perspective of regulators,listed companies and investors.The supervision department should strengthen the qualification audit and supervision for companies’ repurchase behavior.The listed companies should carefully use the tool of stock repurchase in combination with their own situation.And the investors should treat stock repurchase rationally and avoid blind investment to avoid suffering losses.