Author(s)

Yixun Lu, Shuting Sa, Mingfei Zhao

Corresponding Author

Shuting Sa

ABSTRACT

With the development of China's economy, more and more Chinese companies have begun to seek new financing channels through overseas listings. However, since 2010, Chinese concept stocks have been shorted by foreign short-selling institutions with stock prices plummeting and the Crisis of the Chinese breaking out. Through the analysis of a series of short-selling events, it can be found that the differences in the accounting information disclosure systems between China and the United States have led to many problems in the accounting information disclosure of Chinese stocks. Taking New Oriental as a case and using the event research method, this paper analyzes the development process of New Oriental's listing in the United States, the changes in the stock price of New Oriental when it is shorted, and how to fight back in the face of menacing short-selling institutions. At the same time, this paper expounds on the difference between the basic theory of information disclosure and the information disclosure requirements between China and the United States, which analyzes the deep-seated reasons for the illegal information disclosure of Chinese stocks. What’s more, compared with companies listed overseas but facing the choice of privatization and delisting after shorting, the necessity of studying the motivations for similar listed companies like New Oriental to choose to stay in overseas markets is proposed.

KEYWORDS

New Oriental information, disclosure, Chinese stocks, short