Study On The Motivation And Impact Of Listed Companies' Active Reduction Of Convertible Debt To Stock Price

China's convertible bond market started relatively late.The first convertible bond was Baoan Convertible Bond issued by Shenzhen Baoan Group in 1992.However,the closing price of Baoan Group's stock was much lower than the convertible price of Baoan Convertible Bond until the day before delisting.At last,the convertible was declared to be in a standstill for a long time with the convertible rate of 2.7%.Until 2001,when the SFC promulgated the "Measures for the Implementation of Convertible Bonds of Listed Companies" and changed the examination and approval system of convertible bonds issuance to the approval system,the development of convertible bond market was on the right track.The new refinancing policy issued in February 2017 and the new convertible bond regulations issued in September 2017 greatly promoted the quantity and scale of convertible bonds.Convertible bond-to-share price revision clause has been used many times in China's convertible bond market.The phenomenon of large-scale new listed convertible bond initiatively revising the convertible price in 2018 is of great significance to analyze the motivation and influence of listed companies initiatively revising the convertible price.It has great research value.This paper takes Brothers Technologies Company as an example to conduct case study.Brothers Technologies issued Brothers Convertible Bonds in December 2017.It is typical that Brothers Technologies took the initiative to revise the convertible bond to share price on September 21,2018,with a reduction of 52.3%.This paper mainly analyses the motivation and influence of the company's downward revision of convertible bonds from the three dimensions of controlling shareholders,companies and convertible bond investors.It uses case analysis and event study to analyze the brothers' technology.It mainly analyses the motivation and influence of the company's downward revision of convertible bonds from the three dimensions of controlling shareholders,companies and convertible bond investors.Through the research of Brothers Technology,the following conclusions are drawn:(1)Active downward revision of convertible bond to share price meets the needs of controlling shareholders,uses the positive effect of downward revision on the market to reduce holdings of convertible bonds in time to stop losses,alleviate capital shortage,and relieve the warning of stock pledge;(2)Active downward revision of convertible bond to share price can meet the needs of the company,through the analysis of Brothers Technology financial situation,we find that the public The company has the problem of declining solvency.Active downward revision of convertible bond convertible share price can promote convertible bond investors' convertibility,relieve financial pressure of the company and improve the company's solvency;(3)Active downward revision of convertible bond convertible share price can improve the convertible bond price,protect investors' interests and enhance investors' investment enthusiasm;(4)Active downward revision of convertible bond convertible share price damages the rights of small and medium-sized shareholders.In view of the above analysis,we also find that Brothers Technologies has some problems,such as excessive stock pledge of controlling shareholders,unreasonable capital structure and inadequate information disclosure.At the end of the article,we put forward some feasible suggestions: strengthen the supervision of controlling shareholders,optimize the capital structure of the company;improve the relevant laws and regulations of convertible bonds,protect the interests of investors and small and medium shareholders.