Study On Seasoned Equity Offering Market Timing Behavior Of Listed Companies In China

In China, listed companies issue new equity became a hot topic in these years. Many scholars analyze this kind of phenomena and bring forward some explain models, but their research can not break through the traditional financial theory and can not explain the new equity issue favor of the listed companies in China. This paper inducts the market timing theory, base on the actual status of China's stock market to study the seasoned equity offering of China's listed companies.At first, the paper base on the actual status of China's stock market and the market timing theory to analyze the decision making behavior by difference kind of stockholders and manager in listed companies, and then use Multivariate linear regression model and Logit model to test the sample listed companies, the result show that the listed companies prefer issue new stock when their stock price in a relatively high level, this results prove that the seasoned equity offering of China's listed companies exists market timing phenomena. After the test the paper analyze the effect taken by seasoned equity offering on company's operation performance, financial status and benefit of the stakeholder of the listed company. The result shows that after the seasoned equity offering the operation performance of the company has drop down, the financial status of the listed company can not be improved persistence, the blockholder and manager of the listed company obtained remarkable income from the seasoned equity offer, but some stockholder of the listed company has suffered. And then the paper found that the market had negative reaction to the listed company's seasoned equity offering, but market reaction is different when market in different stage. The market condition, market to book value and the participant degree of blockholder also affect the long term market return of the listed company which executive seasoned equity offering.In the end, the paper analyze the existing institution about the seasoned equity offering and point out the existing institution can not restrict the market timing behavior of the list companies and can not improve the efficiency of the equity financing capital, the market could not make a right price to the new stock, it give opportunity the listed companies choose the time to executive the seasoned equity offering.