RE:BBD.A vs BBD.BUp until the closing of BT and the now with an active confirmed plan at paying back the 2021-23 debt, there was a strong liklihood the B shares would be wiped out. For this BIG reason the B's were heavily discounted.
With bankruptcy coming off the table the gap between the A's and B's is returning to it's norm.
GOBBDGO wrote: I always had difficulty understanding why people are willing to pay a premium to buy A shares over B shares. When this stock was in the $4 to $5 range, A shares were only 10 to 15 cents more expensive than B shares. Hence for all practical purposes they were about the same price.
However, since shares have been around $1 or below, A shares are sometime sometime 25 to 30% more expensive than B shares.
My point is why would anyone be willing to pay this huge premium to acquire A shares. I do not get it. There must be a very good reason but I do not see it as A shares have only one more advantage than B shares but many more disadvantages.
True that A shares will grant you 10 votes per share but this has absolutely no real value. You could buy all available A shares available on the stock market but you would still always be outvoted by the Baudoin/Bombardier familly as they hold the majority of voting rights. Hence, this is no real advantage.
However, A shares have many disadvantages over B shares. A shares low transaction volume makes it hard to buy or sell in large quantities in one or few transactions. There are often rather important differences between asking and selling prices for A shares. The price is sometime subject to huge swing in a single day as is currently the case, today, where A shares prices move from a high of $1.24 down to $1.08, a difference of 16 cents compared to 5 cents for B shares.
Would anyone care giving me a good solid reason why you would be willing to pay a premium of 25 to 30% more to acquire A shares over B shares.