RT Journal Article
SR Electronic
T1 Dual-Class Shares and Active Investment Strategies
JF The Journal of Investing
FD Institutional Investor Journals
SP 43
OP 51
DO 10.3905/joi.2011.20.1.043
VO 20
IS 1
A1 Christopher J. Marquette
A1 Thomas G.E. Williams
YR 2011
UL https://pm-research.com/content/20/1/43.abstract
AB In this article, the authors propose a strategy that exploits significant deviations from parity between the two classes of shares for dual-class firms. The strategy involves taking a short position in one class and a long position in the other class, depending on whether the deviation is above or below parity. The analysis reveals potentially profitable opportunities for active investors. The authors “alpha test” the strategy on two sample firms (Blockbuster Entertainment and Lennar Homes) with a retail brokerage account to ensure that it is logistically feasible.TOPICS: Risk management, statistical methods, exchanges/markets/clearinghouses