On The Motivation And Performance Of Qihoo 360 Backdoor Return

In recent years,with the rapid development of the Internet in China,Internet Plus,cloud computing,block chain,shared bikes and other terms have been very familiar to Chinese,the extensive use of Internet technology makes Internet technology company more and more important.In this case,Internet technology companies that went public in the US“come back” one after another now,thus stirring up a new wave of return of China concept stocks.Some of them chose IPO as the path of listing in the domestic market,such as Baofeng Technology;some listed on the New OTC Market,typically Hudong Baike and Tianya Community;of course,some selected merging into listed companies,such as Youku Tudou,which was purchased by Alibaba.However,backdoor listing is the most popular way for them to land on the Main Board,for example,Giant Network went public by borrowing a shell from Century Cruises,Qihoo 360 listed on the Main Board through reverse merging SJEC.Why do Internet technology companies return to China collectively?Why do they choose reverse merger to go public? How do backdoor listing affect the company's performance? This paper takes Qihoo 360 as an example,explores the motivation and performance of Internet technology company's backdoor return through analyzing Qihoo 360.First of all,this paper uses documentary research to sort out the domestic and foreign scholars' research findings on the motivation of privatization delisting and backdoor listing,the selection of shell resources and the performance of backdoor listing,so as to understand the overall condition of research on backdoor listing,thus constructing the theoretical framework of this paper.When sorting out the literature,the author finds that the literature about backdoor listing of Internet technology companies is relatively deficient,thus determining the research direction of this paper and reflecting the research value.Secondly,this paper analyses the motivation and performance of Internet technology companies' backdoor return by case study.This paper describes the general situation of Internet technology companies' privatization delisting,removing VIE structure and the choice of return path after privatization,thus constructing the industry background of the case study.Under the background of this industry,this paper introduces the process of Qihoo360 going public by reverse merging SJEC,and lays great stress on the motivation and performance of Qihoo 360's backdoor listing.Among them,the performance analysis is divided into two parts: short-term performance and long-term performance.The former adopts event study primarily,as the latter uses analysis of financial indicators and analysis of EVA to draw conclusions.The study finds that undervaluation in the US market has prompted Internet technology companies to return,and IPO is time-consuming and its threshold is high,which is not the ideal choice for them to go public,Internet technology companies are more likely to choose backdoor listing when they want to enter capital market quickly.For Internet technology companies that focus on cybersecurity,such as Qihoo360,the gradual opening of capital market and support from all levels of the government are important driving force to go public,and the perfection of cybersecurity laws and regulations injects great motivation into them.In addition,in the choice of listing path,because Qihoo 360 is in heavy debt and desire to enter capital market urgently so as to enjoy great valuation,backdoor listing is the most ideal choice.In the aspect of listing performance,the author finds that the short-term performance of Qihoo 360 improved obviously by using event study;as for the long-term performance,the profitability,operating capacity,solvency and development ability have been greatly improved after going public,and the EVA is positive and the increase of it is very significant.In general,the backdoor listing increases its wealth and improves its performance.In the end,this paper gives the case's enlightenment with the analysis of Qihoo 360's backdoor listing,as the author hopes to provide some useful suggestions for other Internet technology companies' listing plan.