Private placement discount of Chinese listed companies based on the perspective of the investors' sentiment

This paper explored the main driving force of private placement discount based on the perspective of the investors' sentiment. The results show that: (1) the private placement discount has been influenced by the dual effects of rational and irrational factors, but the irrational factors are the main driving force. Also, there is a significant positive correlation between investors' sentiment and private placement discount: the more optimistic (pessimistic) the investors' sentiment is, the greater (smaller) the private placement discounts are. (2) Short-term excessive optimism of investors led to the phenomenon of the long-term vulnerable private placement market.