Research On The Motivation And Effect Of TW Private Placement

China’s current private placement market has been continuously expanding since 2006,especially in the economic development of our country into the stage of transformation,the "new normal" background.With public rights,rights issues and convertible bond financing,compared to private equity financing by issuing pricing flexibility,low cost and obtain higher efficiency of financing and more and more get the favour of listed companies,to help us solve the working capital needs,realize the industrial transformation and upgrading,and increase the company’s core competitiveness is of great significance.Implementation will increase the number of listed companies in recent years there has been a steady rise,some companies even in a year’s application to implement multiple solutions,However,the market reaction and long-term financial performance after private placement are quite different among different companies.Therefore,studying the motivation and implementation effect of private placement in different industries not only helps similar listed companies to make more favorable financing decisions,but also provides reference for the supervision and system optimization of private placement.This paper takes TW company’s two private placement in 2015 and 2016 as a case study.A total of 7 billion yuan to purchase major shareholders of the three companies.To the optimal capital structure theory,synergies and other related theory as the foundation,the first of two directional offering generalizes the concrete contents,implementation process,and the choice of price setting and assets appraisal is reasonable is evaluated,Secondly,analyzes the reason of TW company consider twice.Finally,the event study method and the accounting index method are adopted to evaluate the implementation effect from three aspects: market reaction,financial performance and non-financial performance.The study found that the private placement had a significant boost effect on the stock price of TW company,and initially realized the dual main business operation mode,with improved profitability and growth ability,but the long-term performance failed to continue,and began to decline in the second year after the private placement.Through detailed analysis,it is found that most of them are caused by positive factors,such as the increase in project expansion expenses,the slow rate of profit realization,and the decline in inventory turnoverdue to the substantial increase in production capacity.Therefore,the implementation of the private placement is not regarded as worthless or negative.This paper provides the reference for the medium and small investors to have a deep understanding of the company’s operation and financial situation and a comprehensive understanding of the development of the enterprise.At the same time,it provides a reference for other companies that want to inject high-quality assets and improve the industrial structure through private placement,and provides optimization Suggestions for the improvement of the regulation and system of the private placement market,so as to promote the sustainable and healthy development of private placement.