Is it good or bad to pledge stocks?

As a means of financing, the impact of stock pledge on stock price can not be generalized, but should be analyzed in detail. From a positive point of view, this financing behavior will have a positive impact on the company when the major shareholder pledges shares to obtain funds to support the company's business development. On the negative side, the major shareholder pledged shares because the company's financial situation is not good, hoping to ease the pressure of cash flow in this way, which shows that the company is facing greater financial risks. A stock is a kind of securities, which represents the holder's share of ownership of the company. When he buys shares in a company, he becomes one of the shareholders of the company and owns part of its rights and interests. The price of stock will fluctuate with the change of market supply and demand. When people are optimistic about a company's future prospects, they will be willing to pay a higher price to buy the company's shares, which will lead to an increase in the stock price.