Share reduction requires a 20% income tax.

Reducing 10 billion original shares will require an income tax of 2 billion, and the company will have to pay 2.5 billion. Because the book capital is very low, after the listing, major shareholders will take advantage of the market value to reduce their holdings of the original shares while buying them in the secondary market, instead of waiting for a 10-fold increase before reducing their holdings. Therefore, the more big bull stocks are reduced, the more they will rise. Take a look at China Science and Technology Chuangda, which was reduced its holdings just after it was listed. Now it has increased 20 times.

Reducing holdings is a term used in the stock market and futures market to reduce the number of stocks or futures indicators held.