Based on data of Chinese listed companies’ private placements from 2006 to 2009, this study tries to shed light upon the relationship between large shareholders’ behavior and earnings management and long-run operating performance of listed companies after the private placements by first using a difference-in-differences matching approach. We find that firms conducting large-shareholders-oriented private placements have inordinately poor operating performance during the first two years after the placements. It implies the existence of earnings management.