Seeker Posted October 4, 2004 Share Posted October 4, 2004 Any smart person out there able to explain the difference between the two share classes, ACE.b and ACE.rv? Which one should I buy? seeker Link to comment Share on other sites More sharing options...
Spinnaker Posted October 4, 2004 Share Posted October 4, 2004 .rv is 'restricted voting'. Link to comment Share on other sites More sharing options...
Seeker Posted October 4, 2004 Author Share Posted October 4, 2004 .rv is 'restricted voting'. Yes, I got that but what does it mean for the retail investor. Which is likely to carry a premium? Here is a quote from AC's website: - The Corporation confirmed that 77,334,674 Class A variable voting shares (ACE.RV) of ACE and 11,480,430 Class B voting shares (ACE.B ) of ACE were issued today and will start trading on the Toronto Stock Exchange (TSX) on October 4, 2004. seeker Link to comment Share on other sites More sharing options...
dagger Posted October 4, 2004 Share Posted October 4, 2004 Yes, I got that but what does it mean for the retail investor. Which is likely to carry a premium? Here is a quote from AC's website: - The Corporation confirmed that 77,334,674 Class A variable voting shares (ACE.RV) of ACE and 11,480,430 Class B voting shares (ACE.B ) of ACE were issued today and will start trading on the Toronto Stock Exchange (TSX) on October 4, 2004. seeker Voting shares usually carry a small premium over non-voting, but once that premium is established, the two classes of shares will tend to move up or down in lockstep. I used to own the AC Class A shares in the late 1990s because they were cheaper to buy so I could buy more. When I cashed in in 1999 thanks to Onex, I got the same share buyback price, and hence a larger profit, from having owned the Class A. I could never understand why the Class A shares still sold at a discount to the voting shares once the takeover war started. The rules were clear - in a takeover battle, Class A shares were to get the exact same dollar offer as the voting shares. Sometimes investors and even Bay Street analysts are just flat out stupid. Link to comment Share on other sites More sharing options...
Seeker Posted October 4, 2004 Author Share Posted October 4, 2004 Thanks Dagger. That's helpful. The shares are trading within pennies of each other now but I expect one will trade at a premium to the other once things settle out. If I understand you correctly you seem to be saying that the class b shares should be the ones to buy. I recall hearing (or reading) somewhere that the directors will be required to hold a certain number of shares but can't find a reference to it anywhere right now. You wouldn't happen to know which class and how many shares would you? seeker Link to comment Share on other sites More sharing options...
dagger Posted October 4, 2004 Share Posted October 4, 2004 Thanks Dagger. That's helpful. The shares are trading within pennies of each other now but I expect one will trade at a premium to the other once things settle out. If I understand you correctly you seem to be saying that the class b shares should be the ones to buy. I recall hearing (or reading) somewhere that the directors will be required to hold a certain number of shares but can't find a reference to it anywhere right now. You wouldn't happen to know which class and how many shares would you? seeker I really wouldn't worry about which class to buy. For sake of argument, once things shake out with the short term oriented creditors, if the B is $21, and the variable is $20.50, and the B goes up $1, the variable will rise by the about the same amount, if not the same day, then within a few days. The cheaper class may be the better deal, but I am not well acquainted with all the ramifications of RV shares. You could construct a scenario where creditors dump a disproportionately large volume of RV shares, depressing the RV share price. In that case, you may wish to play the RV shares for the snapback once those most eager to dump their shares for a quick profit exit the scene. Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.