The recent reform on state-owned enterprises (SOEs) in China marks a decisive shift of control rights from the government to the party. In a quasi-natural experiment, stock prices of SOEs significantly drop by 1% compared to non-SOEs in the domestic market. The negative abnormal return of SOEs is also evidenced in Hong Kong Stock Exchange. SOEs requiring greater reshuffles to implement the party’s control experience greater value deterioration. Board independence or auditor quality mitigates party control’s effect. Our research suggests that the political control is inefficient overall.