The Empirical Research Of How Dominant Shareholders Affect The Long Term Excess Returns Of Private Placement

China’s private placement began in 2006,compared to the public issuance of new shares,the private placement not only have more convenients, but also have less underwriting fees.So,more and more companies began to use private placement to raise capital. By 2015, the private placement has reached an unprecedented degree. The scale of private placement have equaled to twenty percent of that equity and debt. Under the environment of intermittent of IPO, private placement has provided a more convenient way to raise capital for many listed companies.The identity of the private placement investors has always been the subject of study between foreign scholars.In general, the investors can be divided into two parts,positive investors and negative investors. Active investors is related to the shareholders and related parties, the passive investors generally refers to the institutional investors. In general, the participators of large shareholders and institutional investors have always mastered more inner information. Thus some scholars believe that they will have a higher benefit. in order to maintain their own interests, large shareholders may try hard to again more benefit from the long term.Based on the above background, this paper collected data of private placement,to answer three questions:(1) how the identity of the investors for the private placement issue affect the discount.(2) Does the participate of major shareholders in the private placement is proportional to the relationship?(3)Does the major shareholders enhance or the discount weaken the effect of the stock’ long-term performance? we get some conclusions.(1) when major shareholders participate in the private placement,they have a higher discount ratio.(2)the participate ratio of shareholders is proportional to the long-term excess return.(3) the major shareholders’ participation will enhance and discount will weaken the effect. We hope to make some recommendations for the current private placement and give some advice to investors when they make dicisions.