Arbitrage: Brown Forman A Shares and Brown Forman B Shares

It is not terribly unusual for some companies to create a dual class structure for the stock. Hershey, Google, and Ford immediately come to mind. In every example of this I have ever studied, the purpose is to keep ownership control in the hands of a select few that want to maintain control over the company by scaling back their investment in it. It’s a controversial practice—people think that investors with $500 million worth of stock should wield 10x as much influence as someone with $50 million in the firm. Others find the practice tolerable because investors have notice of the arrangement at the time they make their investment, and plus, the original … Read the rest of this article!