This is a pretty hot topic on the B board, and no one seems to know why there is almost a $2 difference between A & B shares. The consensus is that they should be selling at the same price. Almost looks like buying B shares is like buying A shares at a $2 discount per share.
Before the Tender, I think that most of the shorts are with A shares (as its really hard to short B shares ever since it came into existence --- beside just buying puts on B shares).
I think that this is a short term thing that we are seeing. Since more shorts are with A shares, its getting a short squeeze right now. Its not sure if the B shares will follow up or the A shares will fall down after this short squeeze on A. Most likely, the A shares will fall down more than the B shares follow up as these is not much shorts on B shares.
But if the ARBs come in to play (short A and long B) then the A and B shares may meet somewhere in the middle (around 17.5)
If A is being squeezed (and I agree that's the most likely reason for the difference), then B reflects the true market value. A is temporarily inflated in that case and should fall back down to wherever B is trading once the squeeze is finished.
I bought B after the TO instead of A. Had I bought A, I would sell A now and use the proceeds to buy B shares, reaping an extra $2+ of profit. But I know the A share holders won't do that. After all, these were the same people who weren't willing to tender at 23 and buy back at 16-17 ;-)
But how does that explain anything other than it tells us there's currently a buyer/seller discrepancy.
We know TOTAL offered $23.25 for both classes, why would they do that if the fundamental value of each class isn't the same?
Okay, Let me explain it you. Consider you owned 100 share of A & B each and tendered in and sold the returned shares today at the close (or when the shares were returned).
A: 93.9*23.25+6.1 x 18.32 (A closing price)=22.95/shre
B: 65.1*23.25+34.9*16.37 (b closing price)=20.84
A shares received $2.10 more than B
I think get_imaginary has a valid point:
"Possibly part of the answer: The B shares may currently be more liquid, since a higher percentage were returned to the market post-TO. Still, I wouldn't expect the delta to be this persistent given that A and B classes will be merged. Arbitrage should have kicked in by now, sending buyers to the B class. The only other idea I can muster is that short positions in A are being squeezed due to their reduced liquidity.... (???) "
What's wrong with Kollesterals statement? He stated that if all A&B shares was tendered they would have been paid the same value, $23.25 per share, which means TOTAL value both classes, equal which is what the topic is about.
Honestly I have no idea what Online_investor mean, I just thought he was implying something weird.
Actually - online_investor was just responding to this erroneous statement by Kollesteral
<< well I can tell you the B shares were tendered for the same as the A shares which made the B shares all the more a better value >>
He didn't make any correlation of the tender %'s to the value of the A or B shares. And I don't see that there is one.