Determinants of Stock Returns for Backdoor Listing Companies

• Main Authors: Hung, Yu-chin, 洪鈺晉
• Other Authors: Wu, Chun-kuang
• Format: Others
• Language: zh-TW
• Published: 2015
• Online Access: http://ndltd.ncl.edu.tw/handle/21488669025709794027

碩士 === 輔仁大學 === 金融與國際企業學系金融碩士在職專班 === 103 === In recent years, backdoor listings are becoming increasingly popular as the reimposition of capital gains tax in Taiwan. We noticed that backdoor listings exist the abnormal stock returns; meanwhile, investors are often ill-informed due to the information asymmetry. In this study, we investigate the relevance of shell company long-term and short-term stock return from two aspects, ownership structure (takeover, voting right, numbers of shareholder) and financial indicators (growth rate of total equity, pretax income, and FCF to debt ratio.) We select 61 shell companies from 2002 to 2012 and delete 3 companies because of incomplete information. The empirical results indicate that the stock of shell companies accumulates abnormal return in the long term are more pronounced than in the short term. Higher growth rate of total equity, pretax income, and FCF to debt ratio are positively associated with long-term shell companies stock returns while equity separation are negatively associated with long-term stock returns. Moreover, we find that no matter how to get operation right have no significant difference on the cumulative abnormal return of the first announcement, 10 days before/after the announcement and 1 year after the announcement. Target firms with poor performance intend to transfer stock via private placement. In the short term, investors may not buy it due to rationality, when they learn about the firms’ financial structure and price of private placement. However, investors put more attention on the improvement of corporate governance and financial structure. Therefore, we believe that the stock price will back to its real price.