Research On The Impact Of IPO Valuation Bubble On The Use Of Funds By Growth Enterprises Market Companies

As the core of the entire IPO process,IPO pricing is directly related to the amount of funds raised by the company.The valuation bubble generated during the pricing process has also become one of the most compelling phenomena in the growth enterprise market.Stimulated by the IPO valuation bubble,the company actually raised more funds than planned financing funds.However,the issue of how the funds raised in the IPO are used has not received sufficient attention in the existing literature.This article provides systematic evidence on the ultimate use direction and efficiency of the funds raised,and how the use of funds varies with the valuation of the IPO.After high issuance price and high initial price earnings ratio,the share price of the listed companies on GEM generally has a downward trend and poor business performance,which highlights the existence of bubbles in its IPO valuation.Compared with the main plate and the small and medium plate,the plate is particularly serious.The corporate system of listed companies on the GEM is not perfect enough,and the management of fund-raising is not mature enough.Based on this,this paper takes 355 companies listed on GEM from 2009 to 2012 as samples,and takes cash flow formula as the core.From the perspective of cash inflow and cash outflow,it distinguishes the inflow of IPO fund,cash flow of post-listing business activities,cash flow of investment activities and cash flow of financing activities to analyze the source and use of funds in the current year of IPO and three years after listing.,and explore the law of capital investment after IPO.At the same time,the Intrinsic Value is calculated by the Residual Income Valuation Model,and then the valuation bubble is measured by the difference between the intrinsic value and the issue price.The IPO valuation bubble is linked with the post-marketing capital use,and Investigate how the size of the IPO valuation bubble will affect the distribution of subsequent funds from the source.Research shows that in the GEM market,companies with low valuation bubbles are more likely to use the funds raised to increase direct investment in inventory,capital expenditures and acquisitions,indicating that they are used for main business expansion,revitalizing existing funds,and realizing capital depreciation.strong efforts,the use of raised funds is more efficient;companies with high valuation bubbles are more inclined to use the funds raised as cash holdings,distribution of dividends,payment of executive compensation or use of direct investment for repayment of loans,etc.The use is less efficient and the financial conservative behavior is more serious.Companies with high bubbles have more financial resources than companies with low bubbles,but the former is less efficient.This shows that the size of the IPO valuation bubble affects the efficiency of the use of funds,and it is highly likely that resource allocation will be inefficient due to the mismatch of investment.Therefore,we must proceed from the source and promote the reform of the stock issuance registration system,so as to reduce the IPO valuation bubble and strengthen the supervision of the capital flow of the GEM companies after listing to improve the efficiency of capital utilization.