Motivation And Performance Analysis Of Company J's Stock Repurchase

Stock repurchase is a company's repurchase of its issued stocks from the capital market in order to reduce capital and adjust the capital structure.Recently,the China Securities Regulatory Commission and the China Banking Regulatory Commission have successively introduced policies to support companies in actively implementing share repurchases.Companies' recognition of share repurchases has further increased.In recent years,the number of companies implementing stock repurchase programs has continued to increase,and the proportion of false repurchase activities in the capital market has dropped significantly.Based on a summary of domestic and foreign scholars' research on the causes and effects of stock repurchase,this article conducts a comprehensive analysis of the motivations and effects of company J's stock repurchase behavior,and strives to enrich the stock repurchase from the perspective of case studies.The motivation and the connotation of financial effect research provide some references for companies planning to implement stock repurchases in the future.This paper analyzes the financial effects of the company J's share repurchase and finds that the share repurchase has not only generated positive financial effects but also negative financial effects.The positive financial effect is that company J's stock repurchase achieved its intended purpose,which not only increased the company's stock price,but also consolidated control,and the company's market value also increased significantly.The negative financial effect is that the stock repurchase has reduced J's solvency,operating capacity and profitability to varying degrees.And the company uses a large amount of funds to buy back shares may make the company miss good investment opportunities and lose potential benefits.The company should take appropriate measures to increase its overall income,reduce the company's debt ratio,and control the company's financial risk to a more reasonable level so that the company can achieve sustainable development.Finally,this article summarizes the enlightenment of the case of company J to other companies that plan to implement stock repurchases,investors who hold stocks of companies that intend to implement stock repurchases,and institutions responsible for monitoring stock repurchase behaviors.First,the companies that plan to repurchase should fully understand and choose the appropriate repurchase timing,Second,the company should choose multiple funding channels for repurchase,which can reduce the risks caused by the substantial reduction of its own funds in the short term.Third,investors who hold stocks of companies that intend to implement stock repurchase should grasp the true intentions of the company's repurchase plan and make rational decisions.Fourthly,relevant departments should increase the transparency of the company's repurchase actions through legal means and strengthen the supervision of repurchase matters.