Crawford has two classes of stock, Class A (CRD.A) and Class B (CRD.B). The two classes share identical economic interests and similar liquidity profiles. However, the Class A shares have no voting rights, while the Class B shares have votes, and thereby should command a premium. How much of a premium? According to currently quoted prices, B shares are currently 43% more expensive than A shares ($4.60 vs $3.20)!!
The biggest risk for potential arbitrageurs are
- the possibility of this price discrepancy further expanding
- the timeliness of the convergence.
As the below graph shows, the current B-share premium of 43% is high by historical standards. However, the premium exploded during the financial crisis - the possibility of Risk 1 clearly rises during periods of acute financial distress. Interestingly, the spread pre-crisis ranged from 0-20%, while post-crisis, the spread has shifted upwards to a new range of 20-40%.
If i give you five talents now, can i trust that you will double it when i return to america?
ReplyDeletea rich young ruler...i am two of these things. haha.
ReplyDeleteThe poor servant got a bad rap - there are worse things than being timid/incompetent, like being dishonest/immoral...
ReplyDeletein response, i certainly wouldn't want you to come back to the u.s. to find that you are not as wealthy as someone may have otherwise promised you :)
more practically, when entrusting talent to others, i think the proper attitude is - Hope for the best, Do not be surprised by the worst...
enjoy ur trip!