Research On Motivation And Economic Consequence Of Major Shareholders' Reduction In Listed Companies

In 2005,China began to implement the reform of non-tradable shares.After the reform,the non-publicly issued shares of the company's shareholders can also be circulated in the secondary market,and the mechanism for shareholders to obtain benefits has changed.The quickest and most direct way is to reduce their share holdings.Therefore,when restricted stocks are lifted,large shareholders of listed companies frequently reduce their holdings in the capital market in a large scale and disorderly way,which seriously interferes with the normal operation of the capital market.In view of this phenomenon in the market and in order to guide shareholders to maintain a rational attitude to reduce their shareholdings,China's Securities Regulatory Commission(CSRC)promulgated “the Provisions on the High Reduction of Shareholding by Shareholders and Directors of Listed Companies in May 2017”.After the new rules were issued,the disorderly reduction of holdings eased somewhat in 2017 and 2018,but the good times did not last long,and as the stock market recovered in 2019,a greater reduction of holdings began in parallel.The healthy development of China's stock market has been affected again,so it is imperative to regulate the behavior of reducing holdings.BOE A is a leading enterprise in the development of China's electronic components manufacturing industry,and also an indispensable backbone in the development of China's electronic industry.However,after the new regulations,the company has encountered multiple and large-scale share reduction by major shareholders,which has seriously affected the development of the company.In this context,this paper takes BOE A as the research object,and on the basis of sorting out relevant literature at home and abroad,first this paper analyzes the reduction behavior of major shareholders from two aspects of the motivation and path of reduction.Then it analyzes the economic consequences of the reduction of major shareholders from three perspectives: the impact of the reduction on the company's financial performance,the short-term market reaction of the reduction and the impact of the reduction on the interests of minority shareholders.Finally,according to the influence results,this paper puts forward the relevant countermeasures and suggestions.Through the research,this paper draws three conclusions: first,major shareholders reduce their holdings mainly for their own benefit maximization;Second,the reduction of major shareholders has obvious opportunistic behavior;Third,the reduction of major shareholders affects the development of the company and infringes the interests of minority shareholders.All the above conclusions indicate that large-scale stock reduction by major shareholders of the company is a bad behavior,which not only affects the sustainable and stable development of the company,but also affects the stable operation of the securities market.Therefore,the government and the company need to make joint efforts to regulate and restrict the reduction behavior of major shareholders.