re: <Reasons for 'B' discount> PS, I am a very disgruntled SPWRB shareholder. I have a Sunpower PV system on my roof.
There are 4 possible reasons for a B discount -
1. lower trading volume on 'B' shares - this one doesn't make much sense to me. The trading on the B's is plenty high enough for liquidity
2. unwinding of the hedge that Cypress Semi owners might have enterred into prior to the spinoff of B shares - CY owners might have sold the A shares short prior to the spinoff to protect their CY share value. To close the hedge, they would have to sell their B shares and buy back the A shares. This makes the A price rise and the B price go down. My opinion of this is that the distribution happened way too long ago for anyone not to have closed the hedge already.
3. CY holders not really interested in SPWRA or SPWRB - Clearly, most people who invested in an SRAM company probably never wanted to invest in solar power. They didn't do anything fancy like pre-selling the A shares, but they are liquidating the B shares as if it were a nice dividend. Again, I think anyone who didn't want their SPWR would have sold it by now, so I don't put any weight in this theory either.
4. stupidity of investors - This theory is that many investors think the B shares are the inferior ones with lower voting rights. I can't believe this is a significant factor, although 1/4 of the posters on the Yahoo board seem to be this dumb.
Personally, I don't think any of the above make sense anymore. I think *someone* is making a lot of money on this disparity, but I don't know "who" or "how."
As a B holder, which represents almost all the voting power of SPWR, I want the BOD to allow B shares to be converted to A shares on a 1:1 basis by the transfer agent. This would probably require an SEC filing, but I want to put a shareholder proposal on the proxy ballot to demand that the BOD make this possible.
Obviously, ALL of the B holders would vote for this proposal. A "right" does not force anyone to exercise it. If you really like the 1000 B shares, convert them to A shares, sell the A shares and buy 1300 B shares. Then repeat the process ad infinitum. Obviously, if there were such a right, the price disparity would disappear nearly instantly.
Petz |
