Research on Company Information Disclosure with the Motivation of Market Value Management:A Case Study of Controlling Shareholders'Equity Pledge of 35.COM
As an important financing method in Chinese capital market,equity pledge is increasingly common among listed companies.However,equity pledge also entails multiple potential risks such as stock price volatility and control rights transfer.Based on case study of 35.COM,from the perspective of information disclosure as a mean of market value management,this paper explores the risk management strategies and economic consequences following equity pledges by controlling shareholders of listed companies.We find that a high ratio of pledged shares by controlling shareholders would induce motives for maintaining stock prices and value management for self-interest,which might lead to strategic information disclosure practices and even violations of information disclosure regulations.In the short term,the strategic information disclosure of controlling shareholders can achieve the goal of stabilizing or boosting stock prices.However,in the long term,these strategic and non-compliant information disclosures may affect the company's value,cause a decline in the quality of accounting information,and infringe on the interests of small and medium-sized shareholders.Research result is of practical significance for standardizing equity pledging,market value management and information disclosure behaviors in listed companies.
equity pledgemarket value managementstrategic information disclosureeconomic consequencelisted company
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