Research On The Time-varying Of The Choice Of The Private Placement In China’s SME And GEM Companies

As China’s capital market gradually moves from the era of post-equity split to the era of full circulation,private placement has become an important way for China’s equity refinancing.But at the same time,there are structural imbalance,institutional arbitration and other facts that harm the interests of investors and disrupt the capital market.In different market environments,the issue of additional issuance,the scale of additional issuance,and the rate of additional issuance have obvious differences.In particular,small and medium-sized listed companies tend to issue additional shares when investor sentiment is high.Because the marginal subscription price is higher,companies could issue smaller stocks to meet financing demand.Moreover,compared with the issuance of large shareholders or their related parties,listed companies give lower discount rates to external investors.Previous studies mostly focused on the characteristics of listed companies,analyzed the decision-making behavior of equity refinancing,and paid less attention to the important role of investors in the issuance process.Therefore,this paper,from the perspective of the important fund supplier-investors,chooses to study the key factors of the investor’s heterogeneous beliefs on the private placement of small and medium-sized enterprises and the GEM: the impact of the issue target,scale,and discount rate.Compared with the previous literature,the innovation of this paper lies in the following: Firstly,from the perspective of investors,this paper examines the impact of investor heterogeneous beliefs on the time-varying choice of China’s listed companies’ private placement options,which is based on the influence of heterogeneous beliefs on stock prices,therefore the paper has expanded the research vision of equity refinancing literature;Secondly,according to the current financing difficulties and financing problems of SMEs,the sample of this paper selects small and medium-sized listed companies instead of the whole A shares,so that the conclusion is more targeted;Finally,on the variable selection,the paper clarify that the excess turnover rate in a certain period before the issuance period of the private placement is used as the substitute variable for heterogeneous beliefs,and the stock market status in different years is further refined to control its influence on the issuance decision.Based on the theory of information asymmetry,market timing theory and the influence mechanism of investor heterogeneous beliefs on stock prices,this paper firstly derives the influence of heterogeneous beliefs on the target,scale and discount rate of private placement.On this basis,we selected the small and medium-sized listed companies that successfully implemented the private placement refinancing in 2013-2018 as a sample for empirical analysis.The main conclusions are as follows:(1)The double effects of heterogeneous beliefs and short-selling restrictions will make the stock price deviate from relative intrinsic value,in most cases,the price is overestimated.At this stage,listed companies are more inclined to issue additional shares to optimistic external investors.(2)In the case that the demand for raised funds has been determined,since the marginal subscription price and the heterogeneous belief increase simultaneously,the listed company can increase its share of financing by issuing a smaller amount of shares,which could weaken the equity dilution effect.Therefore,the stronger the heterogeneous belief of investors,the smaller the scale of issuance.(3)Get a step further,this paper studies the impact of investor heterogeneous beliefs on the directional issuance discount rate,and divide it into groups according to whether the major shareholders or their related parties participate.It is found that the discount rate of the participating groups is directly proportional to the investor’s heterogeneous belief,and only the private investors participate in the private placement,and the discount rate decreases as the investor’s heterogeneous belief increases.Finally,the paper also proposes policy recommendations from the aspects of improving the information disclosure system of listed companies,improving the price-added price mechanism and the relevant systems for financing and securities lending.