Study On The Motivation And Market Effect Of "Bottom-pocket" Employee Increasing In Listed Companies

Out type to increase staff refers to the major shareholders of listed companies of continuity in the face of his company’s share price fell under the unfavorable situation,issued by increasing their initiative,the purpose is to let the group of employees in the company actively to buy the company stock,and implements out commitment for employees at the end of the holding period,and then promote the mood of the small and medium-sized investors,in order to the company on the secondary market stock prices are stable.The practice has been used by many listed companies since it first emerged in 2015.On the surface,the bottom of the behavior to increase the role of signal transmission,in the short term to restrain the decline in the company’s share price.But in fact,the phenomenon of short-term stop will not last too long,because the fundamentals of many companies are more complex,the performance is not outstanding,the previous downward trend will often continue,which may directly or indirectly affect the interests of investors in the secondary market.In this paper,the case study method,event study method and literature study method are adopted to analyze and study the back-pocket increase behavior adopted by Zhejiang Garden Bio-Chemical High-Tech Co.,Ltd.The article consists of five parts.Firstly,the paper introduces the research background of the topic,the content and conceptual characteristics of the bottom-line employee increase in stock holdings,and sorts out the relevant literature on the motivation and market effect of the increase in stock holdings.Secondly,the main business scope,industry characteristics and ownership structure of Garden Biology are introduced.This paper gives a general description of the bottom-boosting behavior of Garden Bio,and sorts out the research paths from the company’s offering of increasing holdings initiative--stock price rise--senior management reducing holdings--no compensation for loss.Moreover,in the fourth chapter of the article,emphatically analyzes the reason of controlling shareholders and employees to increase the stock,and send out type for large shareholders to increase initiative reason to test again,and then use event study method to analyze the company issued its initiative market effect,obtains garden in forward out after its initiative,the company in the capital market,short-term market effect significantly,the conclusion of long-term market effect is not significant.Finally,the paper analyzes the problems existing in the back-of-the-bottom employee increase,such as the lack of corresponding loss compensation mechanism,the space to manipulate the stock price,and the failure to disclose the company’s subsequent progress.Through the analysis of the case,this paper concludes that the controlling shareholder has the motivation to send signals and motivate employees,the motivation to stabilize the stock price and reduce the risk of liquidating positions,the reason for the increase of the actual controller is not sufficient,the market effect of the listed company in the short term is significant positive,and the long-term market effect is not significant.And on the basis of above analysis,put forward the internal need to develop a complete out its plan,improve the system of out type to increase information disclosure of listed companies,regulators set out the threshold of the employees to increase and strengthen the mechanism of protecting minority investors advice,the hope can give investors with valuable reference opinions on the market.