The Study Of The Relationship Between The Private Placement And Operating Results Of Listed Corporations

From 2006 to 2013, the occurrence times of seasoned equity offerings in China’s capital market is 1364, including 1173 times of private placement whose proportion is 86%. Being more innovative and convenient, the private placement is favored by a lot of listed corporations and the capital market since it appeared, and now has become a mainstream method of SEO. The capital market and regulators also had high hopes for it. They thought that the loose distribution conditions could provide a more convenient financing channel for the listed corporations, and could optimize the capital structure for the listed corporations. It can also improve the governance of listed corporations, and enhance the value of corporations.Many domestic and foreign scholars had widely studied the private placement, and some of them conducted the analysis of private placement and firm performance. However, these studies were more focused on the influence of private placement on the stock price. Few studied the effects of private placement by evaluating operating performance. In this paper we evaluate the effect of private placement from the perspective of performance by using a number of financial indicators, and test the changes of operating performance before and after the issuance by using the empirical test.In order to achieve the purpose of this study, this paper uses the method of normative research and empirical research. First of all, through the domestic and foreign literature research, the achievements and status of the relationship between the performance and private placement is reviewed, and on this basis, the perspective and content of the study is established. Secondly, summarizing the present situation and system background of the private placement in China to lay the foundation for the theoretical analysis and empirical research. Again, combined with the optimal capital structure hypothesis, information asymmetry hypothesis, monitor hypothesis, the managerial entrenchment hypothesis and free cash flow hypothesis, four hypotheses are proposed. Finally, by using the method of factor analysis, paired sample T test and independent sample T test, comprehensive scores of the operating performance before and after private placement are calculated and compared.The main conclusions of the study are:(1) The private placement will not have a significant impact on the long-run operating performance of the listed corporations.(2) The effect of private placement on the state-owned listed corporations and the non state-owned listed corporations makes no significant changes, according to the long-run operating performance.(3) The effect of private placement on the listed corporations whose related shareholders participated in is better than those whose related shareholders didn’t participated in.(4) Subscription in cash or assets does not exist significant differences to impact of private placement on the long-run operating results of the listed corporations.The study shows that the private placement of China’s capital market is generally lack of efficiency, the private placement does not cause significant changes of the corporations’ operating performance; and the operating performance of listed corporations whose related shareholders participated in is better, which indicates that the problem of information asymmetry is still serious in China’s capital market.