The Impact Of Equity Pledge On Company Value

Equity pledges have emerged in the domestic capital market in recent years,and shareholder pledges have sprung up like mushrooms.Planned and appropriate equity pledges are a good way of financing,and a great advantage is that they play a role in incentivizing shareholders,and play a good role in promoting the improvement of the corporate governance environment and better business development.However,the non-standard equity pledge behaviors of large shareholders with different uses will also tell the outside world that the financial status of listed companies is facing a gap,and the controlling shareholders are short of funds and other negative information,which will adversely affect the company.At the same time,to a large extent,the equity pledge will leave the company's control right to others.The low-cost way to obtain a large amount of funds will always test the professional ethics of shareholders.It is easy for shareholders to embezzle or empty the company.These negative effects will have a certain impact on the company's value.This article first explores the ways in which equity pledges affect company value.And choose the LeTV.com equity pledge event with the highest attention rate this year as the entry point.The frequent pledge financing events of its controlling shareholder equity have agency problems arising from the company,corporate profit quality management,short-term and long-term market effects,and the impact of R & D investment.It shows that the large shareholder adopts inappropriate equity pledge method,and even relying on such financing for uninterrupted uninterrupted pledges will cause serious damage to the company.This article uses cases to illustrate how equity pledges affect company value.Studies have shown that when pledged by large shareholders' equity,the problem of control rights and cash flow rights diverged by triggering agency problems,which caused the controlling shareholders to change their risk preferences,mismatched the company's resources,and exacerbated financial risks;the controlling shareholders were unable to maintain the stability of the stock price.What should be avoided is to adopt aggressive earnings management methods,which leads to a decline in the company's earnings quality and harm to the company's long-term development;it is well known that the stock price has always been regarded as the external performance of the company's value,and the analysis found that the equity pledge on the stock price in the short term The impact of volatility is small,but it is found in long-term research that its impact on stock prices is very significant,and the higher the pledge ratio,the greater the negative impact;Finally,the conclusions drawn through the LeTV network case and related recommendations are given to small and medium shareholders and supervision Institutions provide reference.