Study On The Influence Of Dual-class Share Structure On Performance Of Pinduoduo

All along,our country has been implementing the same share and same rights principle,but as the capital market matures and human capital advantages become prominent,the selection of a suitable equity structure becomes more and more important to the future development of the company.The principle of the same share and same rights has caused a large number of high-quality innovative technology enterprises to go overseas.The dual-share structure listing of these enterprises causes great losses to our capital market and domestic investors.In this context,the Science and innovation boards of Hong Kong Stock Exchange and Shanghai Stock Exchange gradually allow enterprises to list with dual-class share structure,so that the founders of the company will not lose the control of the company while carrying out equity financing,and ensure the founders’ right to make operational decisions in the company,thus improving the performance of the company.In this paper,Pinduoduo,which was listed in NASDAQ in 2018,is selected as the case company to analyze the impact of Pinduoduo’s dual-class share structure on its performance.Firstly,by using literature analysis method,this paper summarizes the research status at home and abroad on the causes of dual-class share structure,the advantages and disadvantages of dual-class share structure and the influence of dual-class share structure on performance,and introduces related concepts and theoretical basis.Secondly,using the case analysis method,this paper introduces Pinduoduo’s company profile,financing process,changes in equity structure,and the design of dual-share structure system,and analyzes the motivation of implementing dual-share structure of Pinduoduo.Thirdly,the influence path of Pinduoduo dual-class share structure on performance is analyzed.Finally,financial index analysis method and comparative analysis method are used to analyze the influence of Pinduoduo dual-class share structure on its performance by combining financial performance and non-financial performance.In terms of financial performance,it mainly analyzes Tobin’s Q value and ROE value as a whole,uses Du Pont analysis method to disintegrate ROE,and carries out detailed analysis based on traditional financial index analysis method to compare the average value of the same industry in the same period.In terms of non-financial performance,combined with the characteristics of Pinduoduo’s e-commerce industry and the attributes of the company’s technological innovation,market share,platform transaction volume and innovative research and development ability are selected to evaluate non-financial performance.Although the advantages of dual-class share structure are obvious to all,the dual-class share structure also brings certain potential risks to Pinduoduo.For example,if the founder’s rights are enlarged,the internal and external supervision mechanism of the company may fail,the founder may damage the interests of minority shareholders,and the prominent human capital makes the founder’s ability and reputation directly affect the company’s development.In view of these potential risks,this paper proposes to strengthen the internal and external supervision mechanism,strengthen the protection mechanism for minority shareholders,pay attention to improve the comprehensive quality of management and other risk prevention measures.Through comprehensive research and analysis,this paper draws the following conclusions:(1)Dual-class share structure has a positive impact on Pinduoduo’s financial performance.(2)Dual-class share structure improves Pinduoduo’s non-financial performance.(3)Dual-class share structure has certain potential risks.The research of this paper expands the case study of dual-class share structure,hoping to provide some reference for the companies applying dual-class share structure in the same industry.