Research On The Motivation And Financial Effect Of Stock Repurchase Of Listed Companies

Stock repurchase is an important means of capital operation of listed companies.By repurchasing their own circulating stocks,enterprises can boost stock prices,improve capital structure and prevent acquisitions.Compared with western countries,China’s stock repurchase appeared later and smaller.In 2016,only 63 repurchase plans were adopted at the general meeting of shareholders.However,with the active domestic market economy and the gradual improvement of the share repurchase part of the company law in 2018,more and more companies repurchase shares in the A-share market.Affected by the COVID-19 in 2020,the stock market has been in a continuous downturn.In order to stabilize the confidence of investors and protect the interests of investors in special periods,796 enterprises successively carried out stock repurchase plans in the same year.Gree Electric Appliance,a leading electric appliance enterprise,has implemented three stock repurchase plans during this period,of which the third is the largest stock repurchase in the history of a shares.Gree has received so much attention from many parties.In view of this,this paper takes Gree Electric Appliance as an example to explore the motivation for enterprises to implement stock repurchase under the background of COVID-19,and to study its effects.In terms of motivation analysis,first list the four main backgrounds of Gree Electric’s stock repurchase,and then look for the deep-seated motivation of repurchase from the background.In terms of effect research,including the impact of stock repurchase on the market,financial performance,employees and the risk of control transfer,this paper makes a more comprehensive and comprehensive analysis of Gree’s stock repurchase event from multiple angles.Through the research,this paper draws the following conclusions:first,Gree Electric Appliance stock repurchase has deep-seated motivation to prevent the transfer of control rights of major shareholders and improve Dong Mingzhu’s control rights;2、Gree Electric’s stock repurchase has only short-term market effect;3、Gree Electric Appliance stock repurchase can improve financial indicators;4、Gree Electric implements the employee stock ownership plan to enhance Dong Mingzhu’s control.The research of this paper has three meanings:first,it fills the gap of stock repurchase research.Previous studies mostly studied the implementation effect of stock repurchase from the two aspects of market and financial effect.This paper attempts to explore the effect of equity pledge and employee stock ownership plan.Second,Gree Electric Appliance,as a leading household appliance enterprise,implemented the share price repurchase plan during the sharp decline of share price during the epidemic,which is representative of its research and can be used for reference to other listed companies.Third,the background of Gree Electric Appliance’s stock repurchase is complex.Through the research,it is found that its real motivation of repurchase can enable market investors to correctly understand stock repurchase.