A Study On The Timing And Market Impact Of The Reduction Of Major Shareholders

In 2005,China began the reform of split share structure.Before the reform,the shares of non-publicly issued large shareholders could not be circulated on the market,but after the reform,the original shares were circulated on the secondary market.However,China's capital market started relatively late,and many laws and regulations are incomplete,so many large shareholders will reduce their holdings of stocks through loopholes in the law.Huacan Optoelectronics,a research company listed in this article,is a GEM listed company.The barriers to entry are relatively low,the time to set up is shorter,and the risks of investing in the GEM are relatively low.Although in May 2017,the CSRC issued what is said to be the most stringent new regulations in history to reduce holdings,the chaos of large shareholders' reductions is not uncommon in the market.It is very important to explore the actions of the major shareholders of GEM to reduce their holdings,because the GEM's investment environment is not good,and research can make targeted suggestions to improve it.This paper selects Huacan Optoelectronics Co.,Ltd.in the optical optoelectronics industry as a case study company,and combines case study and theoretical analysis to study the two shareholders of Huacan Optoelectronics,Wu Longju and Zhejiang Huaxun,in March 2019.The reasons,timing,methods,and impacts of major shareholder reductions are discussed.Among them,the event research method is used to study the impact of reductions,which can identify whether the company's stock price has really fallen.The calculation of the excess yield found that Huacan Optoelectronics' major shareholder's reduction in holdings did indeed cause market shocks.Finally,this article starts from the perspective of supervision,company,and small and medium shareholders,and puts forward different suggestions for different subjects,hoping to use this to maintain the stable development of the capital market and protect the interests of small and medium shareholders.