| As a highly condensed version of a company’s business,the company name is one of the public information of listed companies that is most likely to attract attention.And changes to the company name or stock name have become a common phenomenon in both Chinese and foreign markets.With the development of China’s capital market,the wave of"name changes" in the domestic market has become prevalent,and even the phenomenon of listed companies changing their company names several times frequently has emerged.Although the name change phenomenon has been restricted by the renaming rules issued by the stock exchange in 2016,nearly a hundred listed companies have changed their names every year in the past five years,and the wave of name changes continues.Some companies hope to highlight the company’s main business or brand through name changes,and enhance investors’ recognition.However,along with the rapid development of new economic industries such as biopharmaceuticals,the internet and new materials,the names of listed companies are also frequently tied to these popular industries.The real motives behind their name changes are difficult to define.In order to investigate the motives and economic consequences of strategic name changes of listed companies,this paper takes Yanshi,a company that has frequently changed its name,as a case study to find out the real motives behind its strategic name changes,and then to study the market reactions and the impact on future business performance of the name changes under different motives.There are two reasons for choosing Yanshi as a case study object:firstly,Yanshi has changed its name four times in the past twenty years,caused by market speculation,rebuilding the company’s reputation,highlighting the intention of strategic transformation,and reduction of shareholding by major shareholders,and Yanshi has achieved strong market feedback only through the company’s name change,which is typical;secondly,Yanshi,as a listed company,has sufficient public information and available financial data,and it has been punished by the Securities Regulatory Commission for the company’s name change,which has aroused greater concern in the market and has a large and widespread impact.Generally speaking,the adequacy of information is relatively high.This paper firstly explains the background,research questions,significance and research ideas,and defines the concept of strategic company name change;explains the theoretical basis from signaling theory and behavioral finance theory,and compares the past research literature from the perspective of research on the motives and economic consequences of name change of listed companies;then introduces the research methodology adopted in this paper and the renaming event of Yanshi.The paper then analyzes the messages conveyed by the strategic name changes of Yanshi,identifies the real motives behind the previous name changes,and explores the impact of the strategic name changes on the company from the perspectives of short-term market reactions,stock value changes and financial performance of the company;finally,draws conclusions and makes suggestions based on the case study of Yanshi.The main conclusions drawn from the case study are as follows:Firstly,the listed company conveys signals of business restructuring,future performance improvement,reputation change and strategic transformation to investors through strategic name change,The final actual situation after the company’s name change may not be consistent,and the strategic name change behavior is somewhat misleading to investors.Secondly,the real motives for the strategic name change of Yanshi were to highlight the business restructuring,market speculation,reduction of shareholding by major shareholders and reputation rebuilding.Third,investors are unable to accurately identify the underlying motives for the company’s strategic name change,and the market reaction to the name change is related to the type of signals it sends,rather than the true motives for the name change.Fourth,the short-term valuation level of stocks is related to the type of signals released by the renaming behaviour,with renaming behaviour that releases signals of business transformation boosting the valuation level of companies;the long-term valuation level of stocks is related to the real motive of renaming behaviour,with the valuation level of renamed stocks motivated by market speculation falling back.Fifth,the financial performance performance of listed companies after strategic name changes is influenced by both positive and negative name change motives from an investor perspective.The theoretical implications of this paper are as follows:First,most of the current research on company name changes focuses on the economic consequences of the name change,and there is less research on the motivation of corporate name changes.The case study is a more in-depth study of the "why" question,which can provide a comprehensive and realistic reflection of the facts of a name change,fully consider various elements and implicit variables,and complement the establishment of a framework for identifying the motivation for a name change.The case studies provide a more in-depth picture of the"why" of a name change,take full account of the various elements and implied variables.Second,most of the existing research focuses on the single name change of a company within a certain period of time.Few literatures study companies with frequent name changes.However,the research objects of this paper have changed their company names many times during the listing period,which can be supplemented.Related research on frequent stock name changes.Thirdly,most scholars have studied the economic consequences of name changes as a whole or as a rough classification.This paper digs deeper into the motives of strategic name changes of listed companies,establishes a link between the economic consequences of name changes from two perspectives:the type of information conveyed by name changes and the real motives of name changes,and compares and analyzes the economic consequences of name change events under different motives,providing new ideas for research on the economic consequences of name changes.The significance of this paper is as follows:for regulators,this paper’s analysis of the renaming behaviour of listed companies can provide reference for market regulators to futher improve the rules on renaming,which can help maintain the order of the securities market and reduce resource mismatch;for listed companies,this paper’s analysis of the economic consequences of different renaming behaviours can provide reference for other proposed renaming companies to make rational renaming decisions in the future;for investors,this paper’s analysis can help investors identify the true motives of companies’renaming and thus protect the legitimate rights of investors. |
