Research On Capital Market Selection When China Concept Stocks Are Shorted

In view of the earlier development of the overseas market and the relatively mature market,many start-up Chinese companies have gone to the overseas market in the face of very limited financing channels.Although domestic companies have achieved overseas financing,foreign investors have The business philosophy is not recognized,coupled with the existence of a relatively mature market and short-selling mechanism,which restricts the refinancing and sustainable development of such enterprises,leading to the privatization of a large number of Chinese stocks and delisting and return to the domestic capital market,but many of them also continue to exist Enterprises that retain overseas markets,such as Beijing New Oriental Education Technology(Group)Co.,Ltd.went public in the United States in September 2006.After the short selling period in 2011,they still remain in the US stock market.They are still listed in overseas markets and maintain high market valuations..The existing literature mostly focuses on the analysis of the delisting theory and the reasons for the delisting of Chinese stocks,and there are few studies on the reasons for the stocks to stay in the original market when they face shorting.It is the choice of different companies to stay in the overseas market and return to the domestic market,but there must be factors affecting their decision-making,and the consequences of this choice have also emerged years later.This article attempts to take a typical company,New Oriental,as an example to focus on the decision-making mechanism and the factors that affect decision-making when companies staying in overseas markets are short,in order to provide other domestic and overseas companies with decision-making reference.First,this article introduces the development process of New Oriental’s listing in the United States and the specific measures taken in response to malicious short selling,and compares it with companies that have listed overseas but have chosen to return to the domestic market after short selling,and proposes to study the reasons why New Oriental listed companies choose to stay in overseas markets Necessity.Secondly,based on the research of Chinese and foreign scholars on the theory of delisting and the reasons for the delisting of Chinese stocks,the general reasons for the Chinese stocks to retain the original market are analyzed.2.The domestic economic situation is uncertain,the overall performance of the US stock market is good,and the company’s own internal control and management capabilities are good.After that,this article focuses on the Chinese stock companies that continued to retain the original market from 2011 to 2018 as the main research object.It conducts an empirical study on its decision-making motivation to retain the original market,and constructs a LOGIT model.In terms of empirical tests,the stocks will continue to retain the original market influencing factors.The results show that:(1)the free cash flow of enterprises,the rate of change in domestic GDP,the price-earnings ratio,the choice of underwriters,and the rate of change of the S & P 500 index are medium.The important factors influencing stock selection to retain the original market;(2)The free cash flow,price-earnings ratio,and S & P 500 index of change index are significantly more significant and the coefficient is positive,indicating that the more free cash flows the company has,the higher the price-earnings ratio,and the US stocks.The better the market performance,the stronger the willingness of enterprises to choose to retain the original market.(3)The rate of change in domestic GDP and the choice of underwriters have a significant impact on the retention of the original market,and the impact coefficient is negative,indicating that the better the domestic market performance,the less likely that companies will remain in overseas markets,and the worse the international underwriting level of the underwriters.For stocks,the easier it is to choose not to keep the original market.(4)The auditor’s choice is significant and does not retain the original market.The coefficient is negative,indicating that the Chinese companies that have selected the four major accounting firms for auditing financial reports will choose to stay in overseas markets.On this basis,this article selects New Oriental as a case company and analyzes its motivations for retaining the original market.It is found that the main reasons for New Oriental to retain the original market are: sufficient free cash flow of the company,relatively good listing quality of the company,and the company.The actual requirements of brand image,the uncertainty of domestic policies and systems,and the favorable environment of overseas policies.In response to malicious short selling,New Oriental Company resolved the problem of undervaluing the market by stabilizing the company’s market valuation by actively issuing press conferences in a timely manner,hiring international financial institutions with high credibility to cooperate,and promptly announcing the public repurchase of stocks.The company’s stock price.New Oriental’s successful case against malicious short selling provides reference and reference for other Chinese companies that suffer from malicious short selling.The innovation of this article is mainly based on the combination of the privatization and delisting motivations,and a new explanatory variable is selected to establish a regression model to analyze the motivations of Chinese stock companies that continue to stay in overseas markets.New Oriental is selected as a research case to further verify and continue For the reasons for remaining in the overseas market,New Oriental’s successful response to malicious short selling provides a reference and reference for other Chinese companies that may or may be suffering short selling.