An Empirical Study On The Influence Of Different Pricing Benchmark Date On The Private Placement

Private placement refers to the listed companies issue stocks to specific investors.Private placement is an important way for listed companies to refinance.According to "The Management Approach of Securities Issue of Listed Companies" issued by China Securities Regulatory Commission in 2011,the pricing benchmark date could be selected by the listed companies in three ways: the board resolution announcement date of the non-public offering of shares,the resolution announcement date of the shareholders meeting,and the first day of issue period.The vast majority of listed companies chose the board resolution announcement date as the pricing benchmark date in the past few years.However,this may cause many problems,such as market manipulation,transfer of benefits etc.This paper chose the Chinese listed companies which complete the private placement from January 2016 to September 2016 as the research object.The research compare and analysis the abnormal return between the listed companies' shares with different pricing benchmark date at some selected certain time.The research found that the abnormal return of the listed companies choosing the board resolution announcement date as pricing benchmark date with the major shareholders or related parties involved in the private placement using the locked issuing price is lower than those choosing the first day of issue period as pricing benchmark date before the listed companies announce the private placement plans.The research also found that the abnormal return of the listed companies choosing the first day of issue period as pricing benchmark date is lower than those choosing the board resolution announcement date as pricing benchmark date with locked issuing price at some selected certain time after the listed companies announce the private placement plans.This paper proves that the adoption of first day of issue period as pricing benchmark date can effectively suppress the distortions and manipulation of the stock price before and after the listed companies announce the private placement plans.The conclusions of this paper support the new revise about the pricing benchmark date aiming to limit the abnormal return in empirical study aspect.