The Research On Influence Of Private Placement To Stock Price Of Listed Companyies

The private placement policy of listed companies in China had beenimproved in2006. Because of the apparent advantages such as lowinvestment cost, simple process, ideal profit, short investment period, therequirement of lowest issuing price and the benefits for the companies’business development, which greatly increased the companies’ issuingwillingness and earned the pursuit of investors, private placement rocketedfrom2006, and has been one of the main company financing methods.The paper has proved the positive stock price effect of the privateplacement announcement of listed companies through the Event ResearchMethod by using the average abnormal return (AAR) and the cumulativeaverage abnormal return (CAAR) as the measurement indexes to verify oneof the hypotheses in the paper. Meanwhile, the paper has proposed thehypotheses to suppose the factors that would influence the effect. Based onthe multivariable liner regression model, the paper has proved the significantnegative effect of companies’ capitalization to the stock price and the positivestock price effect of the quantity percentage of the issuing stocks to the totalstocks, compered the lack of significant effect of other factors.Simultaneously, the paper tested the regression via statistic methods such asMulti-Collinearity Test, Heteroskedasticity Test and t-value Test during theverifying course and this ensured the effectiveness of the regression results toa certain extent. The research conclusions of the paper are absolutely not the author’sfinal answers to the issue and the depth and width of research are still neededto expand. Therefore, the paper has proposed some research directions for theauthor and other researchers to consider and explore.