Research On The Breakage Of DXZG’s Return To A Share Price

Listing of new shares is an important way for enterprises to raise funds.Successful IPO can help enterprises to run well and develop.Under the condition of high underpricing in China’s capital market,it should be normal for the stock price of new shares to rise.However,since the surge of new shares in 2010,the number of IPO breaks has increased,which is contrary to the existing empirical research.Recently,some studies say that the breaking of new shares is a manifestation that the stock market tends to be rational,but the breaking of new shares will cause huge losses to investors and adversely affect the development of the whole capital market.It not only fails to implement the national policy of supporting the development of science and technology manufacturing industry through the stock market,but also affects the smooth progress of enterprises’ own financing activities.Therefore,studying the issue of stock market disruptions is of great importance in guiding listed companies to avoid the risk of disruption,protecting the interests of small and medium-sized investors,promoting the sound development of securities and capital markets and implementing the general policies of the state.First,this paper innovatively proposes to explain the phenomenon of high IPO suppression and high returns in China’s stock market by using Pareto optimal theory,combing through the relevant literature on IPO suppression and breakage problems,and elaborating on the existing studies on IPO playing and long and short-term investors.Based on the stock valuation pricing theory,Pareto optimal theory,prospect theory,information asymmetry theory and stakeholder theory,and taking DXZG’s return to A-share market as an important background,this paper studies the problem of DXZG’s break-up by case analysis.Secondly,the harm caused by the break is studied.This paper analyzes from three angles: the enterprise itself,stakeholders and the securities market,emphasizing that the break increases the financing risk of DXZG,brings losses to investors and underwriting institutions,and reduces the resource allocation ability of the securities market.Furthermore,the reasons for the break are analyzed from three aspects: inside the enterprise,investors and sponsors,market environment and policies.The internal reasons include overpricing,improper timing of listing,poor quality of information disclosure and insufficient comparison with the fundamentals of the enterprise.Investors and underwriters consider investors’ risk-averse behavior,concerted actions’ manipulation of stock prices and sponsors’ underwriters’ opportunism;In terms of market and policy,we consider the reasons such as the surge in IPO number,the high breaking rate of technology stocks and the old practice of stock price formulation.Finally,in order to avoid the problem of breaking and reduce losses,this paper proposes the following policies to DXZG’s internal and external enterprises that are about to return to A-shares,as well as the government and regulatory authorities: For DXZG,it is necessary to improve its internal management system,improve its own operating performance,improve the quality of information disclosure and give full play to the mediaoriented role to enhance investor confidence and cultivate more long-term investors;For the enterprises that are about to return to A shares,it is necessary to set a reasonable price and choose an appropriate listing opportunity according to the enterprise’s own value;For the regulatory authorities,it is necessary to strengthen the punishment for not acting as an underwriter and improve the information disclosure system requirements of listed companies.This paper takes DXZG’s return to A-shares as an important background,hoping that through the research of its breaking cases,the harm caused by breaking can be reduced as much as possible,and it can provide experience for enterprises planning to return to A-shares,so as to avoid falling into the predicament of breaking.