The Motivation And Effect Analysis Of Pinduoduo Adopting Dual-class Share Structure

In the innovation and development of an enterprise,the source of capital is a very important aspect.The size of capital determines whether the enterprise can develop in the long run and whether the enterprise can grow stronger and bigger to a certain extent.Generally speaking,the most common way of enterprise financing is to go public.However,under the traditional mode of "one share,one right",listed financing will inevitably dilute the founder’s control over the enterprise,thus affecting the development strategy formulated by the founder for the enterprise.The dual-class share structure has the characteristics of separating ownership and control right of the enterprise,which can make up for the dilution of the founder’s control right of the company in the "one share,one vote" mode.However,since the capital market of our country before there is a certain shortage in the market environment and related laws and regulations,it does not allow enterprises to adopt double layer share structure to list in our country,resulting in some high-quality innovative enterprises to list overseas,and the capital market of our country has also lost some excellent local enterprises resources.This triggered a heated discussion on the implementation of dual-class share structure in China.Following the continuous improvement of the capital market and related systems,China officially opened the door to dual-class share structure in 2018.In this context,this thesis chooses Pinduoduo,a rapidly developing enterprise in recent years,as the case subject.First of all,the background and significance of this topic are summarized,and the literature review of this thesis is concluded by combing the relevant literature at home and abroad.Furthermore,from the concept and characteristics of dual-class share structure,the theoretical basis of dual-class share structure is summarized.Then,starting from the feasibility and necessity of adopting dual-class share structure of Pinduoduo,a brief introduction is made to Pinduoduo,including several rounds of important financing of Pinduoduo and the content of dualclass share structure adopted.On this basis,this thesis analyzes the reasons and effects of Pinduoduo’s dual-class share structure.Firstly,through analysis,it is found that the reasons for Pinduoduo to adopt dual-class share structure are as follows: to protect the founder’s control over the enterprise,to ensure the effective implementation of the enterprise’s long-term strategy,to cope with the fierce competition in the industry and to achieve the long-term development of the enterprise.At the same time,through the analysis of the changes of relevant indicators,it is concluded that the effects of the dualclass share structure adopted by Pinduoduo include: ensuring the absolute control of the founder,ensuring the effective implementation of the long-term strategy of the enterprise,improving the core competitiveness of the enterprise,and promoting the long-term value of the enterprise.Finally,the following conclusions are drawn through the summary: First,the adoption of dual-class share structure can promote the longterm development of Pinduoduo and improve the value of Pinduoduo.Secondly,the adoption of dual-class share structure can guarantee the founder’s control over the company and improve Pinduoduo’s market share.Thirdly,the adoption of dual-class share structure still has some problems that cannot be ignored,which need to be solved urgently.