A Study On The Insiders’ Opportunistic Behavior In H Company’s Share Repurchase

In 2018,the Company Law revised the relevant regulations on share repurchase and reduced the restrictions on share repurchase,making share repurchase favored by many listed companies,many of which choose to implement share repurchase for various reasons.Among the companies that issue share repurchase plans,there are some companies with poor fundamentals and no repurchase ability,but they issue repurchase plans for share repurchase.At the same time,these buybacks are always accompanied by frequent and large share reduction by major shareholders,resignation of senior executives and other opportunistic behaviors of insiders,which also provides a research direction for this paper.Therefore,this paper takes H Company as the research object.First,this paper introduces H company and its buyback cases,including company profile,main business composition,company fundamentals and buyback plan.Secondly,it analyzes the market effect of H company’s share repurchase.Thirdly,combined with the market effect and fundamentals of H company,it further analyzes the opportunistic behaviors that may exist in H Company’s share repurchase,including insider reduction and senior executives’ resignation.Finally,combining domestic and foreign related systems,this paper puts forward some suggestions that have certain reference value to the system of share repurchase of listed companies in our country.Through this study,the following conclusions are drawn:(1)H company’s share repurchase can bring short-term positive market effect,but cannot bring long-term positive market effect.This paper uses the event study method to calculate the CAR and BHAR values,and finds that H company’s share repurchase can only show a short-term positive market effect,but the longterm market effect is very negative.(2)There is the opportunistic behavior of insiders during the share repurchase period of H Company.According to the analysis of this paper,from the perspective of fundamentals,the fundamental situation of H Company in recent years is not optimistic.In addition,through the analysis of H company’s equity pledge,the reduction of major shareholders and the resignation of senior executives,it is found that H company does have the opportunistic behavior of insiders during the period of share repurchase.In view of the above conclusions,the author puts forward some suggestions which have certain reference value for the relevant system of share repurchase of listed companies in China.It is hoped that the relevant research and suggestions in this paper can contribute to the regulation of share repurchase of listed companies.