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Evolving with the development of internet, the Renrou search engine often focuses on certain social phenomenon. Recently, the Renrou search on information of listed companies has becoming a hot topic in the market, which attracts high attention from investors.
As far as we know, the information of securities market is very special. With multiple interest groups involved, the information of securities market may have a direct impact on share prices.
Therefore, investors should be fully aware of the huge risk involved in the Renrou search.
The Renrou search is not a proper way of information disclosure of listed companies, neither a proper channel for investors to know more about listed companies.
It violates the basic principle of information disclosure. It is the same with blog, stock bar and chatroom in nature, being a method and channel for netizens to communicate with each other.
It is arbitrary, and the truthfulness, correctness, completeness, timeliness and fairness of information can not be guaranteed.
The popularity of the Renrou search signals investors’ hunger for information, but it also hurts equity investors and listed companies.
Generally, the Renrou search carries the following 5 risks.
Firstly, the Renrou search is not a mainstream media, which means its behavior is out of the regulation and may turn into a platform that transmits false information. Average investors may suffer from losses because they do not have more channels to distinguish true from false information.
Secondly, the Renrou search may be used for illegal purposes, publishing false information to manipulate share prices and harming investors’ rights.
Thirdly, it may cause information leakage when the information on the Renrou search is real, which may result in new information discrepancy and discretionary information disclosure, depriving investors from getting information fairly. As a result, it may lead to the unfairness of trading.
Fourthly, it’s hard to recognize the Renrou search’s liability in transmitting false information and divulging substantial undisclosed information, which makes it hard for investors to protect their rights. Usually, participators of the Renrou search adopt virtual name or being anonymity, making it hard for investors to protect their rights when they suffer from losses.
Lastly, the Renrou search interrupts the normal information disclosure of listed companies. Some listed companies said that it brings a lot of trouble when there are more and more network information like the Rnrou search that is hard to tell it’s true or false.
Majority of the Renrou search participators are not insiders. With poor securities analysis skills, many of them even cannot tell group company from listed company, or bonus share issued from profits and bonus share issued from capital reserve.
In addition, information can be distorted intentionally or unintentionally during the transmission process. Whether the information is true or false, listed companies need more time and energy for explanation and clarification.
Therefore, we advise investors to enhance their risk awareness, resist information on the Renrou search voluntarily and do not participate in the transmission of such information.
Investors should find out information about listed companies through the website of the Shenzhen Stock Exchange (SZSE) or the websites of listed companies. They can file claims via the SZSE’s investor education center, stock investor call center and mail box.
Regulators are urging listed companies to improve their information disclosure system in a bid to meet investors’ growing demand of information.
Listed companies should adopts methods like online performance briefing and stock investors Q&A to ensure investors can find out listed companies’ information through the normal channel.
Besides, listed companies need to establish an information search mechanism, reporting to regulators as soon as rumors are spreading.
Regulators are mulling measures to supervise the Renrou search in an effort to further raise the response speed of regulation and improve the quality and efficiency of information disclosure of listed companies.
