Research On The Motivation And Effect Of Continuous Issuance Of Convertible Bonds By Listed Companies

After 2017,the CSRC imposed a series of restrictions on listed companies raising capital through directional add-issuance,which has led to the explosive development of convertible bonds in China.However,due to the short development time of convertible bonds,few companies have been able to issue convertible bonds twice.Combined with the conclusions of domestic and foreign research conclusions,the current research on the serial issuance of convertible bonds by listed companies is relatively inexperienced and lacking in cases,and scholars are mostly negative about the economic consequences brought by convertible bonds,and no consistent conclusion has been formed yet.As the first listed company on China growth enterprise market,Eastmoney successfully issued convertible bonds three times in a row and was able to redeem them early,this paper conducts a case study on the motivation of issuing convertible bonds continuously and a series of consequences for listed companies and puts forward targeted suggestions,which can enrich the existing theoretical research system and provide ideas for other listed companies to carry out in financing.Based on the relevant research domestic and foreign results,this paper analyzes the three successive issues of convertible bonds of Eastmoney based on theories of pecking order theory,principal-agent theory,signaling transfer theory,and other related theories,adopting the case study method to analyze the three successive issues of convertible bonds of Eastmoney,combines the issuance and conversion redemption of the three issues of Eastmoney convertible bonds,compares the design of the relevant terms of the three convertible bonds;analyzes the motivation of the issuance from two perspectives of the external environment and internal demand.The motivation of the issuance is analyzed from two perspectives: the external situations and internal requirements;the company’s situation before and after the issuance of the three tranches of convertible bonds is also compared using the comparison method,and the consequences of the issuance are analyzed from three perspectives: operating effect,financial performance and impact on shareholders.The research of this paper finds that: the successful issuance of convertible bonds by Eastmoney has brought negative short-term market reaction,but long-term positive.Optimized the capital structure of the company and increased the scale of financing,made the ratio of assets and liabilities more balanced and improved the current assets and current liabilities ratio too high to a certain extent.In addition,the enterprise’s profitability and growth capacity have grown rapidly,but we noted that the continuous issuance of convertible bonds has led to expanding long-term debt and weakening its debt-servicing ability.Finally,as Eastmoney has chosen to fully allot the shares to the original shareholders,the dilution of the shareholding ratio and immediate return after the conversion of the three convertible bonds is not obvious.