Study On The Performance Of Private Placement Of Deficient Enterprises

Since 2006,the private placement has developed rapidly.In consideration of the important position of private placement in the capital market,domestic scholars have carried out extensive research on it.However,on the topic of private placement’s influence on listed companies’ business performance,less relevant literature about this.There is no researches about the performance of private placement of deficient enterprises.For deficient enterprises,they need obtain more external fund to maintain business and development.However,external financing is very difficult for deficient enterprises,such as banks do not want to loan to deficient enterprises based on risk considerations,deficient enterprises is restricted to the current regulatory policy on the company’s profit requirements,they cannot take rationing shares and re-issuing new shares.Therefore,private placement is the important source of external financing for deficient enterprises.If we can issue the performance of private placement of deficient enterprises clearly,it will provide more solutions for deficient enterprise to improve business performance.It will be helpful to deficient enterprises to make and select more favorable financing decisions that to maintain and enhance the value of the company.Therefore,study of this article has some practical significance.The article selects the private placement of China Eastern Airlines as the study case.Analysis and research of the performance of private placement of deficient enterprises.Firstly,the article introduces some experts and scholars in the research of private placement.Secondly,this paper introduces the definition of private placement,the mode of private placement and the advantage of private placement.Finally,the author introduces the relations theory about private placement with the business performance of the listed companies,the investment and financing endogenous function relation theory.Then,the author introduces some basic situation of China Eastern Airlines and private placement.The following is the analysis part,which is the core of this article.In this part,the author takes event study to research the issuance of the stock price effect of the enterprises plan announcement date,use more financial indicators to study business performance.In addition,the article analysis the capital expenditure of enterprises.Furthermore,this paper makes further research of the causes of significant performance after private placement.Then,the author puts forward the conclusions:First,the choice of China Eastern Airlines is reasonable by contrasting to other financing ways.Second,the performance of private placement is so significant after detailed analysis.Third,the capital expenditure of enterprises after private placement has improved.Finally,the author will provide more solutions for deficient enterprise to improve business performance.The previous scholars makes positive researches on the issues.In this paper,use the case study method,analysis and research of the performance of private placement of deficient enterprises.It is meaningful for deficient enterprise take effective measures to improve business performance.