A Study On The Investment Strategy Of Private Placement To Major Shareholders

In2006,with the launch of the <Administrative Measures for the Issuance of Securities by Listed Companies>, private placement reappeared in the capital market of China. Because of its low threshold, private placement has become a major equity refinancing means.From2006 to 2015, listed companies have successfully implemented nearly 1800 private placements to re-finance, and the amount has reached 2904.7billion Yuan. Direct financing only takes up a low proportion compared with other countries, so equity financing still has huge room for improvement.The private placement in which the major shareholder participates is a hot topic. The research analyzed the buy and hold abnormal return(BHAR) of different stage in the process. The paper applied multivariate regression model to verify the relationship between BHAR statistics and several variables. The result showed that whether shareholder subscribe with cash or assets, how much it subscribes and the ownership concentration degree has a significant relationship with long- term BHAR, but an insignificant relationship with short-term BHAR,during which the leverage rate and scale of the listed company play a more decisive role. The essay put forward several investment strategies for different period started from dated of announcement date issue.