Review of research on private placements of equity and assets-injecting

This paper is a systematic review on private placements of equity covering the literature both abroad and domestic, including three aspects: theory illustration of private placements of equity´s discount, influencing factors of discount and its announcement effect, tunneling in private placements of equity. Especially pay close attention to assets-injecting of PPE. Through review, we discover that information asymmetry theory, control right theory and chance window theory are fit to illustrate the practice of China´s PPE. The main influencing factors of discount is the identity of shareholders, and market quotations, investor´s mood will also affect discount. PPE has positive announcement effect in short window of event, while its long announcement effect is not ideal. PPE is gradually turning to be a potential way of tunnel of control shareholders and its related party, assets-injecting of PPE has become the new hot topic of the stock market. There are both sustaining and tunneling views of control shareholder´s assets-injecting from the literatures. From the review, this paper finally point out the orientation of following research.