A Case Study Of Company X's "High Stock Dividend" And Major Shareholder's Stock Selling

There is a practice of speculation in the A-share market in China.Generally speaking,the "high stock dividend" behavior of a listed company can get a strong positive response from the external market.Investors do not analyze the company's fundamentals.Following the trend,buying "high stock dividend" stocks can often get abnormal returns,leading them to believe that " The concept of "high stock dividend"means that the stock has investment value.And some companies just cater to the irrational psychology of investors,launch unreasonable transfer plans to manipulate stock prices,and create favorable conditions for large shareholders to reduce their cash holdings.In recent years,although the supervisory management of listed companies' "high stock dividend" has been tightened,many listed companies still use the loopholes of regulatory policies to cater to investors' pursuit of "high stock dividend" and launch operations with companies.The transfer plan that does not match the situation,often accompanied by a large shareholder's reduction in holdings after a brief rise in the stock price,and once the company's stock price drops sharply,it will trap the majority of small and medium investors and harm the interests of investors.In order to study the internal connection between "high stock dividend" and the reduction of holdings of large shareholders,this article selected the implementation of the "high stock dividend" from the weak supervision of 2016 through a preliminary screening of profitability,growth,and the ability to transfer shares.Company X's plan was analyzed along with the"clearance" reduction by major shareholders.This article mainly uses the case study method to sort out the complete process of "high stock dividend" of X Company and the reduction of holdings of major shareholders.Before Company X's "high stock dividend",the industry's prosperity declined,and the company's internal performance declined.It was initially determined that it did not have the "high stock dividend" ability,and the external regulatory policies were not perfect,and the internal equity concentration was high,which could be used by large shareholders "high stock dividend" facilitates the transfer of benefits,so it is doubted whether it carried out "high stock dividend" in order to cooperate with major shareholders to reduce their holdings.After analyzing the specific process of "high stock dividend" and major shareholders' reduction of shares of company X,it was found thatthe motivations of the "high stock dividend" were mainly to enhance the liquidity of the stocks and expand the share capital,and ultimately all of them were to help large shareholders reduce their holdings.Then,after analyzing the impact of the "high stock dividend" of X Company and the reduction of the majority shareholder,this article finds that the external market has a positive reaction to this "high stock dividend" event,and the stock price fluctuates greatly and abnormal investment returns will damage the small and medium-sized companies.The interests of investors and the "high stock dividend" with the motivation of reducing the holdings of major shareholders have adversely affected the financial and reputation of Company X.Finally,a "high stock dividend" plan that does not match the company's actual operating conditions can be implemented,indicating that the company's autonomy role,investor's screening role,and the supervisory role of the supervisory layer have not been played well.Therefore,in order to regulate the transfer behavior of listed companies and reduce the chaos of large shareholders using "high stock dividend" to reduce their holdings,this article puts forward suggestions to listed companies,investors and regulators in the same industry.