Analysis On The Consequence Of The Reaction Of Retail Investors In Huaxing Yuanchuang’s Merger And Acquisition Of Olitong

The STAR(Science and Technology Innovation Board)Market was launched on June 13,2019.On August 23,China Securities Regulatory Commission officially issued the "Special Regulations on Major Asset Restructuring of Companies Listed on the STAR".Compared with M&A(Mergers and Acquisitions)in other sectors,M&A on the STAR Market place more emphasis on industrial synergy and audit efficiency,while also strengthen information disclosure and intermediary responsibilities.In order to encourage M&A on the STAR Market,the regulations have lowered company’s major asset restructuring criteria,reduced the price of issued shares,and increased payment methods.In general,these regulations are conducive to the marketization and standardization of M&A on the STAR Market.As more high-tech companies choose to list on the STAR Market,the M&A are bound to become more frequent.Since the STAR Market has only been launched for three years and relative M&A regulations have just been released,there is little literature on M&A research.Therefore,studying the existing cases of M&A on the STAR Market will have important implications for the future M&A on STAR Market.Individual investors in China are mostly small and medium investors,they prefer to allocate their limited attention to short,prominent and attractive information.At the same time,because lack of professional financial knowledge and the uneven ability to obtain information,they are prone to overconfidence and herd behavior in stock trading,and their emotional tendencies are susceptible to external influences.Therefore,based on related researches in psychology and behavioral finance,this thesis traces the changes in the attention and emotional tendencies of small and medium investors during M&A,and analyzes the consequences of M&A from the perspective of investor reactions.Due to the rapid development of Internet,online forums have increasingly become an important platform for investors to obtain information,and are also the most popular communication platform for small and medium investors.This thesis starts with the first M&A case on the STAR Market-Huaxing Yuanchuang’s M&A of Olitong,and analyzes the background and motivation.This thesis uses python to crawl the comment data of the most popular and most representative online forum in China-the stock community of Oriental Fortune.Use the pageviews of comments to measure the small and medium investors’ attention,and conduct sentiment analysis on the comment text to measure emotional tendencies.It is used to analyze the reaction of small and medium investors caused by the M&A,and then analyze the consequences based on the reaction.Firstly,this thesis introduces the research background and significance of the case,summarizes and reviews the research on the motivations,effects of M&A,and the reactions of small and medium investors.Secondly,it introduces the related concepts of M&A and small and medium investors’ reaction,then summarizes the concept,proxy variables and influence of small and medium investors’ attention and emotional tendencies,finally briefly explains the relevant theoretical basis.Thirdly,this thesis briefly explains the basic situation of both parties and the background of the M&A,then introduces the transaction plan and the process of passing the review in detail.Then we Analyzed the reasons for the M&A,including to increase the performance of Huaxingyuan and raise the company’s stock price;to expand the company’s smart device product line to obtain new profit growth;and to exert the synergistic effect of M&A.Fourthly,we used python to crawl all the comment data of Huaxing Yuanchuang’s stock community from November 7,2019 to July 18,2020,and constructed proxy variables of small and medium investors’ attention and emotional tendencies.Afterwards,it analyzed the changes in the small and medium investors’ attention and emotional tendencies during the period of M&A,especially after the Shanghai Stock Exchange issued the inquiry letter and the company responded to the inquiry letter.Fifthly,starting from the reactions of small and medium investors,it analyzes the impact of M&A on stock prices,the flow of funds in the stock market,the activity of market transactions,and the interest rate of stocks.Finally,according to this thesis,it is concluded that the M&A leverages the synergies between Huaxing Yuanchuang and Olitong;the M&A has attracted extensive attention from small and medium investors;small and medium investors have shown positive sentiment towards the M&A as a whole;the M&A enquiry letter has a strong impact on the reaction of small and medium investors;and the reaction of small and medium investors can convey the impact of the M&A on the stock market.This thesis proposes the following insights: firstly,small and medium investors should establish correct investment values;secondly,listed companies should strengthen the timeliness of information disclosure;thirdly,listed companies should pay attention to small and medium investors’ reactions to identify risks;fourthly,regulators should create a good environment for online interaction.