A Case Study On The Motivation Of ETF Exchange And The Impact On The Company’s Share Price Of Sanqi Entertainment

Since 2019,ETF exchange has stepped into a rapid development stage.As a special investment method in the capital market,ETF exchange can not only help shareholders optimize their own investment portfolios and reduce investment risks,but also moderately reduce the concentration of company shares,optimize the company’s shareholding structure and improve corporate governance.At the same time,ETF exchange also brings many problems,more and more major shareholders of listed companies use ETF exchange to reduce their shareholdings,this reduction will cause the company’s share price to plummet in the short term,affecting the orderly operation of the secondary market,how to regulate the development of shareholder ETF exchange has become an urgent problem to be solved.Based on the basic overview of the institutional background and development trend of shareholder ETF exchange of listed companies in China,this paper selects the two ETF exchanges conducted by the Wu family,the controlling shareholder of 37 Interactive Entertainment,as the case study,and elaborates on the process,motivation and results of ETF exchange of controlling shareholders,and then proposes conclusions and insights for regulating shareholder ETF exchange.For the analysis of the motivation of the exchange,this paper constructs a static game model without regulation,and verifies the conclusions of the model by using the corresponding data of two ETF exchanges of 37 Interactive Entertainment.For the analysis of the exchange results,this paper first conducted K-line analysis of the two ETF exchanges,and then applied the event study method to compare the two ETF exchanges of 37 Interactive Entertainment Hootsuite with block trades to calculate the excess return rate and cumulative excess return rate after the three reduction events.It was found that the motives of 37 Interactive Entertainment’s major shareholders for choosing ETF exchange could be summarized into four points: one is to reduce holdings for cash,two is to optimize asset allocation,three is to avoid the New Regulation on Shareholding Reduction,and four is to reduce the cost of reducing holdings.The game model analyzed the ETF exchange behavior and determined that the motives of 37 Interactive Entertainment’s two ETF exchange s were ETF exchange for cash reduction,ETF exchange for asset allocation optimization.By comparing the impact on the company’s share price between the block trade reduction and the two ETF exchange purchase reductions,we conclude that the share price volatility of the block trade reduction lasts longer and the share price volatility of the ETF exchange purchase reduction is more drastic in the short term.Based on the research of this paper,three conclusions are drawn,and according to the conclusions,corresponding insights for external shareholders,major shareholders and regulators are proposed to improve ETF exchange purchase respectively.