1. Shareholders holding shares in the company means optimistic about the future development of the company. If the company has development prospects, it will fundamentally protect the company's share price. In addition, shareholders increase their holdings of the company's shares to expand the demand for shares, and the demand is greater than the supply, which will push the stock price up at the market level.
2. Institutional overweight: institutions continue to increase their holdings through the secondary market, so this shows that optimistic about listed companies behind stocks is regarded as an important driving force behind the bull market.
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Stock market knowledge:
1. The chairman is very optimistic about his company's stock. Generally speaking, as the most important manager of the company, the chairman is most aware of the company's development potential. For example, the successful research and development of new products, technological upgrading, order increase, performance improvement, introduction of strategic investment and other information that will affect the stock price rise, external investors did not know before the announcement. Therefore, if it is a well-run company, the chairman's increase in shares can easily be interpreted by the market as positive.
2. The stock price is far below the intrinsic value of the company. If the stock market as a whole is depressed, or the industry is hit hard and a company is also affected, then the stock price is obviously lower than its actual value. The chairman is well aware of the high value of his company's shares, so the increased shares can be recovered at a lower cost. According to the value regression theory, the decline caused by this external shock is temporary, and the stock price will soon return to normal level. Therefore, the shrewd chairman tends to increase his holdings when the stock price is undervalued.
3, in order to enhance the company's control ability. Sometimes, due to some reasons, the company's equity is too scattered, and the chairman's right to speak is seriously weakened, resulting in insufficient control over the company and the risk of being replaced. In order to eliminate this potential threat, the chairman may be forced to increase his shareholding in the company. This situation is hard to say, generally it will not directly affect investors' decision-making, and its impact on the stock price is relatively neutral.
4. Prepare a large amount of cash. Sometimes the stock price is very high, far higher than the reasonable valuation of the stock. At that time, the chairman may announce an increase in holdings in order to cash out at a high level. In fact, on the one hand, they may increase their shares slightly to maintain their share prices, on the other hand, they may use the accounts of their controlled relatives to sell a lot of cash. Therefore, when the stock price is at a high level, the chairman should be cautious in increasing his holdings.
5. Boost investor confidence. Some companies are poorly managed and their share prices have been depressed for a long time. If the chairman has no confidence in the future of the company, he may choose to transfer shares and sell the company. If the stock price goes up, then the company may be able to sell a better price. Therefore, the chairman may attract investors to buy by increasing the company's shares.
6. The pledge risk should be eliminated. Some company directors pledge most of their shares to securities companies to obtain liquidity. If the stock price continues to fall, there is a risk of short positions. Compared with the way of directly increasing collateral, the way of increasing the chairman's shares can buy back the shares at a low price for supplementary use, and on the other hand, it can maintain the stock price or even raise the stock price to eliminate the risk of short positions. Therefore, if the chairman increases his holdings at a low level, it is best to find out whether he has a large number of pledged shares.