A Study On The Influence Of Senior Executives’ Opportunistic Selling On The Interests Of Small And Medium-sized Investors

Since the completion of the reform of non-tradable share structure in 2007,insiders such as shareholders and executives of listed companies can freely buy and sell their stocks in the secondary market,which has greatly enhanced the vitality of the capital market.With the expansion of the scale of reduction of holdings by senior executives,there appears the opportunistic behavior of senior executives of listed companies taking advantage of the information advantages of insiders to raise the stock price and then reduce their holdings to a high level to obtain excess returns.The huge profits they earn are often paid by the small and medium-sized investors in the information disadvantage,which has eroded the interests of small and medium-sized investors.Since 2017,although China Securities Regulatory Commission has issued new regulations on senior executives’ holdings reduction and received certain results,the governance effect is still poor.With the development of China’s capital market,the necessity of protecting the interests of small and medium-sized investors is highlighted.Therefore,it is the general trend to study the opportunistic did-down behavior of senior executives.It can not be ignored to regulate the behavior of senior executives did-down and protect the interests of small and medium-sized investors.This thesis takes the four divestment events of Tianwei Food executives from2020 to 2022 as the research object,studies the motivation and means of the opportunistic divestment of Tianwei Food executives,and then analyzes the impact of the opportunistic divestment of Tianwei Food executives on them from the perspective of small and medium-sized investors,and summarizes the enlightenment combined with the interest protection of small and medium-sized investors.It is found that(1)the control advantage and information advantage give the senior executives the possibility to create opportunistic conditions to reduce their holdings.The management of Tianwei Food makes timing disclosure by relying on the information advantage.As the actual managers of the company,they are well aware of the company’s performance.To maximize the profit from reducing holdings.(2)The opportunistic reduction of holdings by the executives of Tianwei Food infringes on the interests of small and medium investors.The specific path is: first,the stock price of Tianwei Food drops,causing direct economic losses for small and medium investors;second,it affects the earnings per share of Tianwei Food and reduces the capital utilization efficiency of small and medium investors.Third,it reduces the valuation of enterprises,thereby indirectly damaging the equity value of the hands of small and medium investors.Finally,based on the above analysis,this thesis focuses on how to reduce the information advantage of the management of listed companies to small and medium investors,reduce the information asymmetry between the management of listed companies and small and medium investors,and summarizes the case enlightenment from three aspects: enterprise internal control system,external institutional supervision,small and medium investors’ participation and self-protection consciousness.