Gu Yao: Overraising has inevitability, which is the valuation difference after industrial capital is converted into financial capital. The founders of the industry have a strong motivation to obtain this difference, which is the "entrepreneurial profit" brought to the founding capital after going public.
Overraising has its inevitability, which is the valuation difference after industrial capital is converted into financial capital. The founders of the industry have a strong motivation to obtain this difference, which is the "entrepreneurial profit" brought to the founding capital after going public. The biggest motivation for going public is to obtain this entrepreneurial profit. At present, in China, excessive fundraising and entrepreneurial profits will continue to exist for a long time in the foreseeable future. Inevitable Overraising The effectiveness of the capital market lies in providing financing venues and improving corporate governance. The financing function refers to the capital mobilization ability of the capital market. The reason why this capital mobilization ability is attractive to enterprises is not because of its strong financing ability. Compared to other financing channels such as banks, the financing scale of the capital market is not superior, especially in China's single banking system. In the current era of excessive currency abundance, the large-scale financing required by industrial capital by banks is even easier to achieve. In terms of cost comparison,IPOThe form of equity financing is at the highest end of the financing order for comparing financing costs. It can be said that,IPOThe form of equity financing in the capital market has neither cost advantages (high financing costs) nor financing convenience (even under the registration system, the financing process is relatively cumbersome and requires more time), nor is it a separate option for scale financing. Industrial capital transforms into financial capital after going public. The purpose of industrial capital's enthusiasm for going public, in terms of the motivation of capital owners, is actually to obtain the valuation difference between financial capital and industrial capital.stayIPOA common phenomenon can be observed in the market, which is so common that it is often overlooked by people——Oversubscription. Another wrong representative understanding of the phenomenon of excessive fundraising is that excessive fundraising is the result of the existence of foam in the market, indicating that the market is too speculative, rich in funds, or immature investors, and so on. In fact, over raising almost exists in any market state, that is, whether the market is prosperous or sluggish, over raising always exists. This situation indicates the inevitability of over raising, which is the valuation difference after industrial capital is converted into financial capital. The founders of the industry have a strong motivation to obtain this difference, which is the "entrepreneurial profit" brought to the founding capital after going public. The listing of enterprises transforms industrial capital into financial capital, and stock trading is separated from industrial capital trading. Financial capital represents equity certificates, while stock trading is only the purchase and sale of income certificates such as coupon certificates. The valuation of industrial capital is determined by the social average profit margin of the industry, assuming that this social average profit margin isA; The valuation of equity certificates such as stocks after listing is determined by the industry's average dividend or interest rate, which is assumed to beB；AMust be greater thanBBecauseAless thanBIt is not sustainable, in which case the enterprise will quickly enter a state of extinction, that is, the operation is not sustainable. Whether it isIPOIs it an additional issuance? The capitalization price for entering the capital market is based onBValuation is carried out, therefore the valuation of the new equity certificate must be greater than the valuation of the original unlisted industrial capital, resulting in over raising - new projects of the enterprise are valued based on industrial capital, while issuance is valued based on financial capital. The biggest motivation for going public is to obtain entrepreneurial profits The difference arising from differences in capitalization methods, namely the difference between the capital that generates average profits and the capital that generates average dividends or interest, is the entrepreneurial profit. The founder obtained the entrepreneurial profits generated by changes in their own investment capitalization methods due to going public, and the majority of the entrepreneurial profits obtained from the newly added financial capital due to going public. The biggest misconception about the motivation for going public is that going public can improve corporate governance. The main reason why listing can improve governance is based on the macro effects from a capital perspective. The shareholding system allows capital to be 'controlled by small amounts' rather than improvedXEfficiency; Combining with the capital market system, the effectiveness of large-scale socialized production can be achieved. In fact, as the scale of enterprises expands, the difficulty of operation and management increases,XThere is usually a decrease in efficiency. Indeed, joint-stock companies have the economic advantage of being easier to raise capital and expand, and socialization gives capital a longer perspective, which also brings technological advantages. A joint-stock company is also conducive to achieving pure economic and technical requirements. The predatory management impulse lurking in the hearts of every capitalist, under the socialized operation of the joint-stock system, is usually controlled and retreated behind pure technical requirements; Compared to individuals or partnerships, pure economic requirements can also break through the same technological barriers-Restrictions on personal property that contradict economic requirements. However, the economic effects of improving corporate governance through a joint-stock system do not necessarily need to be achieved through listing. In mature Western markets, when entrepreneurial profits gradually decrease to a certain level, the "privatization" process of reverse listing even exceeds the speed of listing. When some countries are still emphasizing increasing the proportion of securitization and accelerating listing to play the role of capital markets, European and American stock markets have2003Since the beginning of the year, it has entered the stage of "de equity", and the number of listed companies and stocks has shown a continuous decreasing trend, especially2008In the era of "negative interest rates" after the global financial crisis in, the phenomenon of buyback cancellations and privatization of listed companies has significantly increased. Enterprises use this as a means to improve their balance sheet effect and obtain the "dual valuation enhancement" effect of industrial and financial capital. Prospects for Overraising and Entrepreneurship Profits In China, the current excessive fundraising and entrepreneurial profits will continue to exist for a long time in the foreseeable future. The more complex analysis in the stock market is that the average return rate, which serves as the denominator of capitalization, needs to be added to the risk premium, i.eB+Risk premium; The risk return rate, which includes risk factors, will not exceed the average social profit margin, otherwise there will be no new stock issuance - achieving project expansion through other financing methods is usually a more convenient means in practice. Although both may change due to environmental factors such as financial markets and economic cycles, the ranking relationship between the two will not change. There has been a trend of "de equity" in the European and American markets for many years, and the trend continues, indicating that the excessive fundraising and entrepreneurial profits in Western capital markets have long been eliminated or reduced to have no impact on capital decisions. Without entrepreneurial profits, under the influence of financing order theory, "de equity" is a long-term trend, which is also the background of the wave of mergers in Western exchanges in recent years. It can be seen that there is a fierce competition for listing resources not only on Wall Street, but also in the entire Western market, and there is a trend towards more intense competition among Western financial markets. Without entrepreneurial profits, there can be no overraising. The elimination of entrepreneurial profits lies in the elimination of differences in capitalization methods between the two types of capital, namely the convergence of capitalization valuation rates between industrial capital and financial capital. Entrepreneurship profits in the Western market have experienced about300After years of history, there has finally been a phenomenon of withdrawal from the historical stage, due to both the accumulation of long-term factors and the recent (last century)90Factors that emerged after the era. The long-term factor is mainly the improvement of the transaction system of enterprise assets and property rights market. After the development of the merger and acquisition market, the valuation method of enterprise property rights capital is becoming increasingly market-oriented and based on expectations, and is increasingly shifting towards adopting the social average profit margin; The recent factors are mainly the development of the private equity market, including angel capital, venture capital, seed capital, industrial fundsPEThe development of various equity markets such as funds has led to an increasing shift in the interest rates used for industrial capital valuation towards market average returns. The result of the development of two factors is that industrial capital tends to use financial capital valuation methods, while financial capital tends to use industrial capital valuation methods. The two move in opposite directions and gradually intersect, thereby eliminating entrepreneurial profits. Obviously, China's enterprise property rights trading market and accounting methods still need to be improved; The private equity market is also in an early stage of development; The entrepreneurial profits of a company going public are still relatively abundant and will exist for a long time. Obtaining entrepreneurial profits still determines the motivation for the company to go public, so the weakening of operations after going public is still the norm, and investors need to carefully identify. (The author is an independent economist) |
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