A Case Study On The Impact Of Geo-jade Petroleum Corporation Stock Pledge On Firm's Value

When analyzing the ownership structure of a company,the most important part is the proportion of major shareholders in the shares.Among them,the phenomenon of controlling shareholders forming "one share is dominant" is more common in the emerging capital market.Under such a background,the agency problem has changed from the traditional first type of agency problem to the second type of agency problem--the conflict between controlling shareholders and minority shareholders.In Chinese Stock Market,the most common phenomenon is the pledge of stock rights of major shareholders.The current situation of almost "no stock,no bet" has aroused extensive thinking in the academic and financial circles.What role stock pledge will play in the value of listed companies this paper will answer this question through case analysis and put forward Suggestions.Through event analysis,Z-score model,Tobin Q and other research methods,this paper selected a-share listed intercontinental Geo-jade Petroleum as a case to analyze the impact of equity pledge on enterprise value.Based on agency theory,this paper studies the market performance,financial risk assessment and Tobin Q analysis of intercontinental oil and gas from the perspective of equity pledge.Finally concluded that the Geo-jade Petroleum major shareholders in Guanxi Zhenghe frequent and high proportion of equity pledge brought serious violation,to the enterprise value not only to fell played a promoting role in the short term,in the long term,since 2014 the frequency of the pledge did not make the enterprise the management condition improved,the pledge of the proceeds of the money is not all flow to the enterprise,the enterprise value instead through equity pledge growth showed a trend of decline.This conclusion shows that the pledge of equity by the major shareholders of intercontinental oil and gas damages the value of the enterprise,and also infringes on the minority shareholders and other stakeholders.Finally,according to China's relevant provisions on equity pledge and the current situation of the market put forward some Suggestions.This paper hopes that the equity pledge analysis with Geo-jade Petroleum as an example can give some warnings to the majority of investors in the market.At the same time,it also plays a supplementary role in the academic research on the impact of equity pledge on enterprise value.Therefore,the case study on the impact of Geo-jade Petroleum equity pledge on corporate value has certain practical significance and theoretical value.