Retail Investors Usually Follow Suit When They Are Guided.

The idea of Chinese investors is, "if a company wants to make a deal, then the deal will make money," and once held Moelis & Co.

Joseph Chow, China's business and currently operating financial consultancy in Beijing, said CJC Partners.

"Retail investors are usually guided by the trend."

According to the data collected by Peng Bo in the 20 largest mergers and acquisitions in China, the average share price rose by 31% in the past month, which was announced in the past year by the potential acquirers of the "major reorganization" plan, while in the US, the figure is -4%.

According to the traditional concept of merger and acquisition, the price of the acquirer usually drops after the announcement of the paction, but the situation in the Chinese market is just the opposite now.

In a very high proportion of retail investors in China, people are more willing to believe that mergers and acquisitions can bear fruit, regardless of regulatory authorities to combat misleading information about mergers and acquisitions, and the acquisition of real acquisitions from the acquisition of long-term interests of the case is also very rare.

Buying for acquisition news

The risk is not low.

At the same time, the China Securities Regulatory Commission expressed concern about the false merger and acquisition plan and related insider trading.

In China, most trading announces are exactly the same.

A company first openly stated that it planned to carry out a "major reorganization" and sometimes changed words to say that there were "significant issues", which stopped stock trading.

A few weeks later, the company will announce more details and resume trading.

After the resumption of trading, the stock price usually rises much, but does not rise much.

Ultimately, the announced pactions are not all common sense mergers and acquisitions.

In the past year, seven of the 20 largest mergers and acquisitions in China were reverse mergers, or so-called backdoor listing.

In developed markets, because of concerns about the high price and growth of management,

Too aggressive or buyout financing will dilute shareholders' equity, while developed market traders usually dump their acquirers' shares.

These stocks have been exposed to supervision: regulators issued some draft regulations in June to ensure the authenticity of the company's announcements with other measures.

Just last month, Higginson forest in Fujian was in existence.

In the plan report, business income was increased indirectly, and the Commission was punished.

In 2014, the announcement of the deal pushed the company's share price up 72% in the six trading days.

In February last year, the company cancelled the "major asset restructuring" plan on the grounds that it could not reach agreement on the terms of the paction.

In August 19th, the company said in a notice that the company and its management were sincere apologies to all investors.

The two time the reporter called the office of the secretaries of the company, no one answered.

Even a company that breaching a default will welcome the rise in share prices after announcing the "major asset restructuring".

The shares of sainty ship had more than 800 million yuan loans about a year ago when the loan was suspended, and resumed in July. After that, the company announced plans to issue shares to its controlling shareholders to acquire assets, and the stock rose 23% in the four weeks.

The company repeated several announcements in August that the company had not yet escaped bankruptcy risk and that the merger plan was subject to regulatory approval.

Deming, fund manager of Shanghai Heng Sheng Asset Management Co., Ltd. said that the theme of M & A attracted retail investors, but many mergers and acquisitions did not land.

Deming said that as regulators tightened the rules, the company's announcement of the stock price rally after the takeover plan is likely to slow down.

SamsonLo, head of Asian mergers and acquisitions in Hongkong, UBS, said that some of the acquirers' share prices were logical.

He pointed out that the value of Chinese enterprises investing overseas is often better than that of investing in China, maintaining or improving existing valuations through overseas profits.