| Due to the advantages of the stock right of pledged listed companies,such as fast raising of funds,adjustable financing scale,unchanged control right and flexible repayment term,the stock right pledged financing is favored by more and more major shareholders of listed companies.However,the disadvantages are also obvious.Once the stock price falls systematically,the major shareholders need to provide sufficient margin or further increase the proportion of equity pledge to alleviate the crisis of stock exposure.Otherwise,the pledgee will sell shares to make up for losses,and the shares are likely to lose their control over the listed company.Under such pressure,listed companies tend to increase their share prices by means of large shareholders’ increase in holdings,buyback of some shares,equity incentives,etc.A large amount of existing literature shows that share repurchase is a low-cost and effective method to improve the stock price,which can reduce the number of issued shares,transmit the signal that the stock price is undervalued,and thus enhance the enterprise value.Therefore,share repurchase is gradually used by many listed companies as an effective means to alleviate equity pledge risks.In 2018,the stock market index continued to fall,and the risk of large shareholders’ stock pledge and stock exposure again attracted the attention of the capital market.China Securities Regulatory Commission revised the company law to support listed companies to conduct share repurchase to relieve the pressure of stock price decline.Under the guidance of the policy,the capital market launched a huge wave of repurchase.But the listed company’s issued shares repurchase plan agreed to by the company itself can only and approval process is simple and fast,so some companies use capital market information asymmetry of stock price manipulation,rapid lifting shares through share repurchase announcement to suspend shares pledge risk after ending is the buyback plan,this will no doubt this is weak of small and medium-sized investors caused great damage.Based on this,this paper chooses yatong as a case company and studies the stock repurchase behavior and economic consequences of listed companies from the perspective of stock pledge of major shareholders,in order to put forward some Suggestions for small and medium-sized investors,internal governance and external supervision.This paper mainly adopts the method of combining theoretical research and caseanalysis.Firstly,it carries out theoretical analysis based on signal transmission theory,financial leverage theory,control market theory and principal-agent theory to obtain the influence of stock pledge of major shareholders on share repurchase behavior.Secondly,this paper selects yatong as the case company,sorts out the whole process of the company’s share repurchase event from the aspects of company profile and stock pledge,and emphatically expounds the background and reasons of the whole process of yatong’s share repurchase.Thirdly,this paper analyzes the economic consequences when the repurchase announcement is issued and the economic consequences when the repurchase program is terminated,starting with the trend of individual stocks,market reaction and stock price volatility.Finally,based on the above theoretical research and case analysis,this paper draws the main conclusions of this paper,and provides certain experience and enlightenment for minority shareholders,internal governance and external supervision.The research findings of this paper are as follows :(1)it is becoming more and more common for large shareholders to pledge their shares in a high proportion in China’s capital market.At the same time,the revision and release of China’s share repurchase policy make it faster and more convenient for listed companies to carry out share repurchase,and the scale of China’s share repurchase is also expanding.(2)it is one of the important reasons for a listed company to release its share repurchase plan to alleviate the equity pledge risk.In order to cope with the forced closing pressure brought by stock pledge and the risk of control transfer,major shareholders may release positive information to the market through share repurchase announcement,so as to increase the company’s share price.(3)companies that do not ultimately complete share repurchase are often accompanied by unsatisfactory business performance and unreasonable capital structure.Therefore,the authenticity of a company’s share repurchase plan can be judged by combining with the company’s fundamentals.(4)a company with a high proportion of pledged shares of major shareholders can still get a positive market response when it issues its share repurchase plan,and its share price increases significantly.When it terminates its share repurchase plan,its share price drops sharply,presenting a negative market response,which will bring serious negative impact on the capital market.The innovation of this paper lies in :(1)this paper enriches the research on the influence of stock pledge of major shareholders on corporate behavior,and deepens the correlation between stock pledge of major shareholders and share repurchase behavior.(2)this paper focuses on the analysis of the impact of declared buyback and cancelled buyback on the capital market,which provides a more novel research perspective for the study of share buyback behavior,and is more comprehensive than the previous single study on the impact of share buyback behavior on the economic consequences. |
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