The Case of "Investor Protection, Clear Rules and Risk Recognition": Only by rational analysis can we get rid of falsehoods and retain authenticity
As a public company, listed companies must abide by rules and be honest, and ensure the truthfulness, accuracy and completeness of their information disclosure are their basic obligations. If you fabricate false information and disclose something that doesn't exist, and make investors fooled, you must be severely punished.
In 2013, company A's stock rose sharply for three consecutive days, with a cumulative deviation of more than 12%, so trading was suspended for verification. After the suspension, the company disclosed that it did have major plans. However, because the project is in the stage of argumentation and consultation, there are major uncertainties, and it is expected to be difficult to keep confidential, the company's stock will continue to be suspended. A week later, the company’s stock application was resumed, and the board of directors reviewed and approved a number of proposals related to non-public issuance at the same time. The non-public offering feasibility report shows that the company has signed a capital increase framework agreement with a certain two parties, and the subject of the agreement, the time of signing, and the amount of capital increase all say the same. As soon as the news came out, the stock price rose accordingly. Investors felt that the company had to increase capital and shares, and introduce strategic investors to reflect the recognition of the value of the company by strategic investors. What a good thing, buy decisively.
Unexpectedly, this capital increase framework agreement was subsequently found out by the Securities Regulatory Commission, which is nothing but a fiction. Company A and certain two parties have never signed a framework agreement for capital increase and share expansion. This favorable agreement was fabricated out of thin air by the listed company. The news proves to be false, but the stocks that investors bought are real, and they are still in high positions. Company A was warned by the China Securities Regulatory Commission for disclosing false information and fined 300,000 yuan.
Honesty is the foundation of a person, and it is also the way for a company to settle down. Investors must not pay for fictitious good news. Faced with the good news disclosed by listed companies, investors must keep their eyes open, analyze rationally, and consider the company’s financial status, business model, business development, industry competition and other factors to carefully consider whether the company is doing practical things and whether there is any performance. Support, whether the investment value really exists. After rational analysis, we can remove the false and keep the truth, and we can go longer and longer on the road of value investment. (Source: SFC website)
