Private placement discount of Chinese listed companies based on the perspective of the investors' sentiment

Jun Yu, Zhu Bao Wei, Pin Ng, Jing Tang

Research output: Contribution to journalArticlepeer-review

Abstract

This paper explored the main driving force of private placement discount based on the perspective of the investors' sentiment. The results show that: (1) the private placement discount has been influenced by the dual effects of rational and irrational factors, but the irrational factors are the main driving force. Also, there is a significant positive correlation between investors' sentiment and private placement discount: the more optimistic (pessimistic) the investors' sentiment is, the greater (smaller) the private placement discounts are. (2) Short-term excessive optimism of investors led to the phenomenon of the long-term vulnerable private placement market.

Original languageEnglish (US)
Pages (from-to)237-242
Number of pages6
JournalJournal of Chemical and Pharmaceutical Research
Volume5
Issue number12
StatePublished - Dec 1 2013

Keywords

  • Investors' sentiment
  • Market effect
  • Overreaction
  • Private placement

ASJC Scopus subject areas

  • Pharmaceutical Science

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