Price discovery in dual-class shares across multiple markets

We extend the standard price discovery analysis to estimate the information share of dual-class shares across domestic and foreign markets. By examining both common and preferred shares, we aim to extract information not only about the fundamental value of the rm, but also about the dual-class premium. In particular, our interest lies on the price discovery mechanism regulating the prices of common and preferred shares in the BM&FBovespa as well as the prices of their ADR counterparts in the NYSE and in the Arca platform. However, in the presence of contemporaneous correlation between the innovations, the standard information share measure depends heavily on the ordering we attribute to prices in the system. To remain agnostic about which are the leading share class and market, one could for instance compute some weighted average information share across all possible orderings. This is extremely inconvenient given that we are dealing with 2 share prices in Brazil, 4 share prices in the US, plus the exchange rate (and hence over 5,000 permutations!). We thus develop a novel methodology to carry out price discovery analyses that does not impose any ex-ante assumption about which share class or trading platform conveys more information about shocks in the fundamental price. As such, our procedure yields a single measure of information share, which is invariant to the ordering of the variables in the system. Simulations of a simple market microstructure model show that our information share estimator works pretty well in practice. We then employ transactions data to study price discovery in two dual-class Brazilian stocks and their ADRs. We uncover two interesting ndings. First, the foreign market is at least as informative as the home market. Second, shocks in the dual-class premium entail a permanent e ect in normal times, but transitory in periods of nancial distress. We argue that the latter is consistent with the expropriation of preferred shareholders as a class.

Impacto da emissão dual-class na estrutura de capital

A tese propõe que empresas que emitem apenas ações com direitos de voto utilizam mais capitais de terceiros do que empresas que emitem tanto ações votantes quanto não votantes. No desenvolvimento do trabalho, foi demonstrada a relevância de relacionar endividamento ao fato de uma empresa emitir ou não ações sem direito a voto, considerando as principais teorias de estrutura de capital e a realidade brasileira. Como os modelos teóricos que explicam o nível de endividamento das empresas ainda carecem de capacidade explicativa, a busca por novos determinantes está presente na literatura de estrutura de capital. A ocorrência da emissão de ações em classes diferenciadas (dual-class) como fator impactante no nível de endividamento foi analisada sob três prismas: de mercado, dos setores e das empresas que unificaram suas ações. Pelas três investigações ficou evidenciada a perspectiva de que o endividamento seja menor nos casos de emissão de ações preferenciais, considerando o ambiente de negociação e regulamentação do Brasil. A aceitação da tese tem reflexos teóricos na identificação de um fator que deve ser levado em consideração nos modelos de estrutura de capital, bem como suscita a importância de gestores, investidores e credores reconhecerem que o fato de uma empresa ser dual-class impacta não apenas na sua estrutura de controle, mas principalmente em sua estrutura de capital. Entre as considerações da aceitação da tese, estaria o reconhecimento de que empresas que ingressam no Novo Mercado na prática estão, no longo prazo, trocando o uso de ações preferenciais como forma de financiamento pela emissão de dívida.

Three essays on dual-class stock structure

Dual-class stock structure is characterized by the separation of voting rights and cash flow rights. The departure from a common "one share-one vote" configuration creates ideal conditions for conflicts of interest and agency problems between controlling insiders (the holders of voting rights) and remaining shareholders. The owners of voting rights have the opportunity to extract private benefits and act in their personal interest; as a result, dual-class firms are often perceived to have low transparency and high information asymmetry. This dissertation investigates the quality of information and the information environment of firms with two classes of stock. The first essay examines the quality of information by studying accruals in dual-class firms in comparison to firms with only one class of stock. The results suggest that the quality of accruals is better in dual-class firms than in single-class firms. In addition, the difference in the quality of accruals between firms that abolish their dual-class share structure by unification and singe-class firms disappears in the post-unification period. The second essay investigates the earnings informativeness of dual-class firms by examining the explanatory power of earnings for returns. The results indicate that the earnings informativeness is lower for dual-class firms as compared to single-class firms. Earnings informativeness improves in firms that unify their shares. The third essay compares the level of information asymmetry between dual-class firms and single-class firms. It is documented that the information environment for dual-class firms is worse than for single-class firms. Also, the finding suggests that the difference in information environment between dual-class firms and single-class firms disappears after dual-class stock unification.

Three Essays on Dual-Class Stock Structure

Dual-class stock structure is characterized by the separation of voting rights and cash flow rights. The departure from a common “one share-one vote” configuration creates ideal conditions for conflicts of interest and agency problems between controlling insiders (the holders of voting rights) and remaining shareholders. The owners of voting rights have the opportunity to extract private benefits and act in their personal interest; as a result, dual-class firms are often perceived to have low transparency and high information asymmetry. This dissertation investigates the quality of information and the information environment of firms with two classes of stock. The first essay examines the quality of information by studying accruals in dual-class firms in comparison to firms with only one class of stock. The results suggest that the quality of accruals is better in dual-class firms than in single-class firms. In addition, the difference in the quality of accruals between firms that abolish their dual-class share structure by unification and singe-class firms disappears in the post-unification period. The second essay investigates the earnings informativeness of dual-class firms by examining the explanatory power of earnings for returns. The results indicate that the earnings informativeness is lower for dual-class firms as compared to single-class firms. Earnings informativeness improves in firms that unify their shares. The third essay compares the level of information asymmetry between dual-class firms and single-class firms. It is documented that the information environment for dual-class firms is worse than for single-class firms. Also, the finding suggests that the difference in information environment between dual-class firms and single-class firms disappears after dual-class stock unification.

Separation of Control and Cash-Flow Rights of State Owned Listed Enterprises: Channels of Expropriation after the Discriminated Share Reform in China

Literature on agency problems arising between controlling and minority owners claim that separation of cash flow and control rights allows controllers to expropriate listed firms, and further that separation emerges when dual class shares or pyramiding corporate structures exist. Dual class share and pyramiding coexisted in listed companies of China until discriminated share reform was implemented in 2005. This paper presents a model of controller to expropriate behavior as well as empirical tests of expropriation via particular accounting items and pyramiding generated expropriation. Results show that expropriation is apparent for state controlled listed companies. While reforms have weakened the power to expropriate, separation remains and still generates expropriation. Size of expropriation is estimated to be 7 to 8 per cent of total asset at mean. If the "one share, one vote" principle were to be realized, asset inflation could be reduced by 13 percent.

A Grammar of Tajio. A Language Spoken in Central Sulawesi

This work is a description of Tajio, a Western Malayo-Polynesian language spoken in Central Sulawesi, Indonesia. It covers the essential aspects of Tajio grammar without being exhaustive. Tajio has a medium sized phoneme inventory consisting of twenty consonants and five vowels. The language does not have lexical (word) stress; rather, it has a phrasal accent. This phrasal accent regularly occurs on the penultimate syllable of an intonational phrase, rendering this syllable auditorily prominent through a pitch rise. Possible syllable structures in Tajio are (C)V(C). CVN structures are allowed as closed syllables, but CVN syllables in word-medial position are not frequent. As in other languages in the area, the only sequence of consonants allowed in native Tajio words are sequences of nasals followed by a homorganic obstruent. The homorganic nasal-obstruent sequences found in Tajio can occur word-initially and word-medially but never in word-final position. As in many Austronesian languages, word class classification in Tajio is not straightforward. The classification of words in Tajio must be carried out on two levels: the morphosyntactic level and the lexical level. The open word classes in Tajio consist of nouns and verbs. Verbs are further divided into intransitive verbs (dynamic intransitive verbs and statives) and dynamic transitive verbs. Based on their morphological potential, lexical roots in Tajio fall into three classes: single-class roots, dual-class roots and multi-class roots. There are two basic transitive constructions in Tajio: Actor Voice and Undergoer Voice, where the actor or undergoer argument respectively serves as subjects. It shares many characteristics with symmetrical voice languages, yet it is not fully symmetric, as arguments in AV and UV are not equally marked. Neither subjects nor objects are marked in AV constructions. In UV constructions, however, subjects are unmarked while objects are marked either by prefixation or clitization. Evidence from relativization, control and raising constructions supports the analysis that AV and UV are in fact transitive, with subject arguments and object arguments behaving alike in both voices. Only the subject can be relativized, controlled, raised or function as the implicit subject of subjectless adverbial clauses. In contrast, the objects of AV and UV constructions do not exhibit these features. Tajio is a predominantly head-marking language with basic A-V-O constituent order. V and O form a constituent, and the subject can either precede or follow this complex. Thus, basic word order is S-V-O or V-O-S. Subject, as well as non-subject arguments, may be omitted when contextually specified. Verbs are marked for voice and mood, the latter of which is is obligatory. The two values distinguished are realis and non-realis. Depending on the type of predicate involved in clause formation, three clause types can be distinguished: verbal clauses, existential clauses and non-verbal clauses. Tajio has a small number of multi-verbal structures that appear to qualify as serial verb constructions. SVCs in Tajio always include a motion verb or a directional.

Design, synthesis and biological evaluation of a class of bioisosteric oximes of the novel dual peroxisome proliferator-activated receptor α/γ ligand LT175.

The effects resulting from the introduction of an oxime group in place of the distal aromatic ring of the diphenyl moiety of LT175, previously reported as a PPARα/γ dual agonist, have been investigated. This modification allowed the identification of new bioisosteric ligands with fairly good activity on PPARα and fine-tuned moderate activity on PPARγ. For the most interesting compound (S)-3, docking studies in PPARα and PPARγ provided a molecular explanation for its different behavior as full and partial agonist of the two receptor isotypes, respectively. A further investigation of this compound was carried out performing gene expression studies on HepaRG cells. The results obtained allowed to hypothesize a possible mechanism through which this ligand could be useful in the treatment of metabolic disorders. The higher induction of the expression of some genes, compared to selective agonists, seems to confirm the importance of a dual PPARα/γ activity which probably involves a synergistic effect on both receptor subtypes.

Class of self-dual models in three dimensions

In the present paper we introduce a hierarchical class of self-dual models in three dimensions, inspired in the original self-dual theory of Towsend-Pilch-Nieuwenhuizen. The basic strategy is to explore the powerful property of the duality transformations in order to generate a new field. The generalized propagator can be written in terms of the primitive one (first order), and also the respective order and disorder correlation functions. Some conclusions about the charge screening and magnetic flux were established. ©1999 The American Physical Society.

Dual HLA class I and class II restricted recognition of alloreactive T lymphocytes mediated by a single T cell receptor complex

The alloreactive human T cell clone MBM15 was found to exhibit dual specificity recognizing both an antigen in the context of the HLA class I A2 molecule and an antigen in the context of the HLA class II DR1. We demonstrated that the dual reactivity that was mediated via a single clonal T cell population depended on specific peptide binding. For complete recognition of the HLA-A2-restricted specificity the interaction of CD8 with HLA class I is essential. Interestingly, interaction of the CD8 molecule with HLA class I contributed to the HLA-DR1-restricted specificity. T cell clone MBM15 expressed two in-frame T cell receptor (TCR) Vα transcripts (Vα1 and Vα2) and one TCR Vβ transcript (Vβ13). To elucidate whether two TCR complexes were responsible for the dual recognition or one complex, cytotoxic T cells were transduced with retroviral vectors encoding the different TCR chains. Only T cells transduced with the TCR Vα1Vβ13 combination specifically recognized both the HLA-A2+ and HLA-DR1+ target cells, whereas the Vα2Vβ13 combination did not result in a TCR on the cell surface. Thus a single TCRαβ complex can have dual specificity, recognizing both a peptide in the context of HLA class I as well as a peptide in the context of HLA class II. Transactivation of T cells by an unrelated antigen in the context of HLA class II may evoke an HLA class I-specific T cell response. We propose that this finding may have major implications for immunotherapeutic interventions and insight into the development of autoimmune diseases.

Major histocompatibility complex (MHC) class II-positive dendritic cells in the rat iris - In situ development from MHC class II-negative precursors

Purpose. To examine the postnatal development of major histocompatibility complex (MHC) class II-positive dendritic cells (DC) in the iris of the normal rat eye. Methods. Single-and double-color immunomorphologic studies were performed on whole mounts prepared from rat iris taken at selected postnatal ages (2 to 3 days to 78 weeks). Immunopositive cells were enumerated, using a quantitative light microscope, and MHC class II expression on individual cells was assessed by microdensitometric analysis. Results. Major histocompatibility class II-positive DCs in the iris developed in an age-dependent manner and reached adult-equivalent density and structure at approximately 10 weeks of age, considerably later than previously described in other DC populations in the rat. In contrast, the anti-rat DC monoclonal antibody OX62 revealed a population of cells present at adult-equivalent levels as early as 3 weeks after birth. Dual-color immunostaining and microdensitometric analysis demonstrated that during postnatal growth, development of the network of MHC class II-positive DCs was a consequence of the progressive increase in expression of MHC class II antigen by OX62-positive cells. Conclusions. During postnatal growth, the DC population of the iris develops initially as an OX62-positive-MHC class II-negative population, which then develops increasing MHC class II expression in situ and finally resembles classic DC populations in other tissue sites. Maturation of the iris DC population is temporally delayed compared with time to maturation in other tissue sites in the rat.

Highly robust chitosan hydrogels via a fast, simple and biocompatible dual crosslinking-based process

Load-bearing soft tissues such as cartilage, blood vessels and muscles are able to withstand a remarkable compressive stress of several MPa without fracturing. Interestingly, most of these structural tissues are mainly composed of water and in this regard, hydrogels, as highly hydrated 3D-crosslinked polymeric networks, constitute a promising class of materials to repair lesions on these tissues. Although several approaches can be employed to shape the mechanical properties of artificial hydrogels to mimic the ones found on biotissues, critical issues regarding, for instance, their biocompatibility and recoverability after loading are often neglected. Therefore, an innovative hydrogel device made only of chitosan (CHI) was developed for the repair of robust biological tissues. These systems were fabricated through a dual-crosslinking process, comprising a photo- and an ionic-crosslinking step. The obtained CHIbased hydrogels exhibited an outstanding compressive strength of ca. 20 MPa at 95% of strain, which is several orders of magnitude higher than those of the individual components and close to the ones found in native soft tissues. Additionally, both crosslinking processes occur rapidly and under physiological conditions, enabling cellsâ encapsulation as confirmed by high cell survival rates (ca. 80%). Furthermore, in contrast with conventional hydrogels, these networks quickly recover upon unloading and are able to keep their mechanical properties under physiological conditions as result of their non-swell nature.

Shogaol-huprine hybrids: Dual antioxidant and anticholinesterase agents with beta-amyloid and tau anti-aggregating properties

Multitarget compounds are increasingly being pursued for the effective treatment of complex diseases. Herein, we describe the design and synthesis of a novel class of shogaolhuprine hybrids, purported to hit several key targets involved in Alzheimer"s disease. The hybrids have been tested in vitro for their inhibitory activity against human acetylcholinesterase and butyrylcholinesterase and antioxidant activity (ABTS.+, DPPH and Folin-Ciocalteu assays), and in intact Escherichia coli cells for their Aβ42 and tau anti-aggregating activity. Also, their brain penetration has been assessed (PAMPA-BBB assay). Even though the hybrids are not as potent AChE inhibitors or antioxidant agents as the parent huprine Y and [4]-shogaol, respectively, they still exhibit very potent anticholinesterase and antioxidant activities and are much more potent Aβ42 and tau anti-aggregating agents than the parent compounds. Overall, the shogaolhuprine hybrids emerge as interesting brain permeable multitarget anti-Alzheimer leads.

Shogaol-huprine hybrids: Dual antioxidant and anticholinesterase agents with beta-amyloid and tau anti-aggregating properties

Multitarget compounds are increasingly being pursued for the effective treatment of complex diseases. Herein, we describe the design and synthesis of a novel class of shogaolhuprine hybrids, purported to hit several key targets involved in Alzheimer"s disease. The hybrids have been tested in vitro for their inhibitory activity against human acetylcholinesterase and butyrylcholinesterase and antioxidant activity (ABTS.+, DPPH and Folin-Ciocalteu assays), and in intact Escherichia coli cells for their Aβ42 and tau anti-aggregating activity. Also, their brain penetration has been assessed (PAMPA-BBB assay). Even though the hybrids are not as potent AChE inhibitors or antioxidant agents as the parent huprine Y and [4]-shogaol, respectively, they still exhibit very potent anticholinesterase and antioxidant activities and are much more potent Aβ42 and tau anti-aggregating agents than the parent compounds. Overall, the shogaolhuprine hybrids emerge as interesting brain permeable multitarget anti-Alzheimer leads.

Shogaol-huprine hybrids: Dual antioxidant and anticholinesterase agents with beta-amyloid and tau anti-aggregating properties

Multitarget compounds are increasingly being pursued for the effective treatment of complex diseases. Herein, we describe the design and synthesis of a novel class of shogaolhuprine hybrids, purported to hit several key targets involved in Alzheimer"s disease. The hybrids have been tested in vitro for their inhibitory activity against human acetylcholinesterase and butyrylcholinesterase and antioxidant activity (ABTS.+, DPPH and Folin-Ciocalteu assays), and in intact Escherichia coli cells for their Aβ42 and tau anti-aggregating activity. Also, their brain penetration has been assessed (PAMPA-BBB assay). Even though the hybrids are not as potent AChE inhibitors or antioxidant agents as the parent huprine Y and [4]-shogaol, respectively, they still exhibit very potent anticholinesterase and antioxidant activities and are much more potent Aβ42 and tau anti-aggregating agents than the parent compounds. Overall, the shogaolhuprine hybrids emerge as interesting brain permeable multitarget anti-Alzheimer leads.

Shogaol-huprine hybrids: Dual antioxidant and anticholinesterase agents with beta-amyloid and tau anti-aggregating properties

Multitarget compounds are increasingly being pursued for the effective treatment of complex diseases. Herein, we describe the design and synthesis of a novel class of shogaolhuprine hybrids, purported to hit several key targets involved in Alzheimer"s disease. The hybrids have been tested in vitro for their inhibitory activity against human acetylcholinesterase and butyrylcholinesterase and antioxidant activity (ABTS.+, DPPH and Folin-Ciocalteu assays), and in intact Escherichia coli cells for their Aβ42 and tau anti-aggregating activity. Also, their brain penetration has been assessed (PAMPA-BBB assay). Even though the hybrids are not as potent AChE inhibitors or antioxidant agents as the parent huprine Y and [4]-shogaol, respectively, they still exhibit very potent anticholinesterase and antioxidant activities and are much more potent Aβ42 and tau anti-aggregating agents than the parent compounds. Overall, the shogaolhuprine hybrids emerge as interesting brain permeable multitarget anti-Alzheimer leads.