Research On The Motivation And Influence Of Internet Enterprises Implementing Dual-Class Share System

Internet enterprises are characterized by light assets and heavy human capital.In the market of a single shareholding system,the expansion of scale must be realized through equity financing,which will seriously affect the value of the founder’s human capital,which virtually weakens the comprehensive competitiveness of Internet enterprises.The dual-class share system mainly controls the enterprise by separating cash flow and voting rights.A large number of Internet enterprises have stabilized the control of enterprises and achieved rapid development of enterprises through the establishment of a dual-class share system.So,What’s the motivation for Internet enterprises to set up a dual-class share system?What’s the advantages and disadvantages of the dual-class share system for Internet enterprises?What impact will it have on Internet enterprises?This series of issues is of great significance to the vigorous development of Internet companies,the prosperity of their domestic capital markets,and the localization of China’s dual equity system.This paper uses the case study method to study the inotivation,process and impact of the implementation of the dual-class share system in Internet enterprises.On the basis of defining relevant concepts,this paper first reviews the relevant theoretical basis and literature research,and then introduces the current situation,motivations,advantages and disadvantages of Internet enterprises implementing the dual-class share system.Then,taking Alibaba as an example,a briefly describe the establishment process of Alibaba’s dual equity system.Finally,this paper analyzes the positive impact of the dual-class share system on Alibaba from the perspective of non-financial indicators and financial indicators,and also reveals the risks of the dual-class share system on Alibaba in many aspects.Both theoretical analysis and case studies show that the implementation of the dual-class share system by Internet enterprises effectively alleviates the problem of equity dilution after financing and maximizes the value of human capital,which is conducive to the long-term development of the company.The dual-class share system has brought many positive economic consequences to Alibaba:on the one hand,agency costs have fallen,and on the other hand,profit levels,debt repayment levels and development levels have improved.The research in this paper enriches the research content of the dual-class share system,and has certain enlightenment significance for Chinese Internet enterprises and capital market reform.