The Relations between Annual Report Tone Management and Major Shareholder Reduction of Listed Company—A Case Study Based on Ourpalm Company

Case studies on listed companies influencing their stock price by manipulating the tone of sentiment in information disclosure thus to reduce the holdings are rarely seen in existing literature. Based on the perspective of tone management, this paper take OURPALM Co., Ltd. as a case study, which is a listed company, finding that the external competitive pressure faced by game industry and the huge goodwill risk accumulated by mergers make it possible for the majority shareholders to reduce the holdings through information asymmetry. The major shareholder made a tone of manipulation through the more optimistic annual report information and more bright earnings performance report. After raising the stock price, the major shareholders took the opportunity to reduce their holdings. The supervision loopholes are the most important reasons for the reduction of the holdings of internal people through tone manipulation. Studies have shown that under the condition of information asymmetry, the company has a strong motivation to manipulate the market timing through active information disclosure to satisfy its own interests. Regulators must take a multi-pronged approach in terms of information disclosure and regulations of reduction to achieve better protection of small and medium investors and a healthy development of the capital