A Case Study On The Effect Of Stock Reduction By The Major Shareholders Of LeTV

At present,the reform system of non-tradable shares in China has changed the profitmaking method of major shareholders.Before the reform,the profit mode of the major shareholders only depends on the performance of the company,and after the reform,the major shareholders turn to the securities market one after another.However,China's securities market is still developing gradually,the relevant laws are not yet perfect,the market restraint mechanism and management mechanism are not mature enough,and the market information is not completely transparent.What major shareholders usually think of is not to try their best to solve the company's problems,but to sell shares in large quantities to profit from it.This kind of behavior of the major shareholders not only damages the reputation of the company,but also makes the minority shareholders lose their trust in the securities market and hinders the healthy development of the securities market.Under the current system,even if the minority shareholders know the motivation of the major shareholders to reduce their holdings,the result of the major shareholders' reduction behavior can only occur after the reduction behavior.In this case,the minority shareholders gradually lose confidence in the major shareholders.In addition,even if the major shareholders declare in the document that they want to verify the financial information of the company before making a decision,it does not indicate the authenticity of the financial treatment of the major shareholders.It is also difficult for the relevant departments to verify them in accordance with the current relevant regulations.In addition,the stock market and relevant departments stressed the need to revise the expected rules for shareholders to reduce their holdings by limiting the number and proportion of major shareholders reducing their holdings for the first time.Increase the actual rights of accounting staff and reduce the role of major shareholders in the financial decisions of the whole company.Even if the major shareholders determine the company's financial decision-making plan,in the actual implementation process,can also arrange for supervisors to follow up,to ensure the normal use of funds,to ensure that major shareholders to fulfill the obligations in the announcement.In view of the failure of major shareholders to fulfill their obligations of announcement,corresponding punishment measures must be taken.Since LeTV's major shareholder's reduction behavior has a strong typicality,and the consequences of the reduction have brought serious negative impacts on the company and society,LeTV has been selected as the object of this study,through securities investment income and investment.Risk,company operating performance,capital situation analysis of LeTV major shareholder's motives for reducing holdings,through the cumulative excess returns and excess returns rate analysis of market reaction after the reduction,through the company's operating level indicators,profitability indicators,cash flow indicators The paper analyzes the economic consequences of the reduction of shareholder's shareholdings,and analyzes the impact of the shareholding behavior on the interests of minority shareholders by comparing the changes in the stock prices of LeTV.Therefore,the stable development of the company is inseparable from the perfect internal governance mechanism,which constrains the behavior of the management.At the same time,it is inseparable from the supervision of the relevant departments.The relevant departments should strengthen the formulation of the pre-disclosure system for major shareholders to protect the interests of minority shareholders.For small and mediumsized shareholders,there should be a sound law to protect the legitimate interests of small and medium-sized shareholders,and reduce the possibility of infringement from the source.At the same time,an effective internal governance structure can enhance the company's risk resistance,so the internal governance structure still needs to be strengthened.Finally,small and medium-sized investors should improve their professional level and risk awareness,so as to avoid blindly following the trend and causing economic losses.