Notice of RetractionAn analysis on the effect of private placement by Chinese listed companies

Notice of Retraction

After careful and considered review of the content of this paper by a duly constituted expert committee, this paper has been found to be in violation of IEEE´s Publication Principles.

We hereby retract the content of this paper. Reasonable effort should be made to remove all past references to this paper.

The presenting author of this paper has the option to appeal this decision by contacting TPII@ieee.org.

In this paper we examine three main effects (which are announcement effect of issue plan, discount of issue price and post-issue long-run abnormal returns)of private placement of equity by public firms in China and the relationships among them by separating the samples into three groups (large shareholders, outsider-investors, large shareholders and outsider-investors) according to the identity of participating investors. Our conclusions are as follows: 1. Plans of private placement of equity have significant positive announcement effect. 2. Large shareholders´ participation increases the average discounts of issue price of groups relative to that of the group of outsider-investors and stronger announcement effect is associated with higher discount across three groups. 3. There are significant positive relations between issue price discounts and changes in stock prices during the period from the announcement of issue plan to execution of issuance, and issue price discounts is partially caused by the overoptimistic reaction of market. 4. There are significant negative relations between the participating investors´ rational expectations about future performance of stock prices and issue prices discounts. 5. Participating investors of private placements gain significant positive post-issue long-run abnormal returns which are caused by discounts.