RESEARCH ON THE CURRENT SITUATION, MOTIVATION, AND ECONOMIC CONSEQUENCES OF EQUITY PLEDGE IN LUXSHARE PRECISION INDUSTRY

Authors

  • Li Nanxi
  • Bi Xinyu
  • Xie Juanhong
  • Wu Mali

Abstract

This article takes Luxshare Precision Industry Co., LTD (referred to as Luxshare Precision) as an example to analyze the current situation, motives, and economic consequences of its equity pledge. The study found that Luxshare Precision has mainly undergone six equity pledges after its listing. The main reasons for Luxshare Precision's equity pledge include rapid expansion of the company, high financing efficiency of equity pledge, and maintenance of controlling shareholder control. Although equity pledge meets the company's financing needs, it can also trigger financial risks for the company and have a negative impact on the stock price.

Keywords: Equity pledge, controlling shareholder, risk prevention

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Issue

Vol. 9 No. 1 (2024): Journal of Business Innovation

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Articles

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The content of Journal of Business Innovation (JBI) is licensed under a Creative Commons Attribution 4.0 International license (CC BY NC ND 4.0). Authors transfer the ownership of their articles' copyright and publication right to JBI. Permission is granted to Penerbit Universiti Melaka to publish the submitted articles. The authors also permit any third party to freely share the article as long as the original authors and citation information are properly cited.