Notorious Spread Between VW Ordinary and Preference Shares
If you find two almost identical Volkswagens on a car dealer's lot and one costs 25 per cent less than the other, the cheaper one is usually likely to be the preferred choice. But a surprising number of investors seem to forget that the same logic applies to the stock market. A wide spread has opened up between the price of Volkswagen's ordinary shares, currently around 290 euros, and the price of its preference shares, which are trading at just under 220 euros. For foreign investors, and apparently especially those from the USA, the differences are not always easy to see through. The preference shares are identical to the ordinary shares, but have no voting rights, nor are they bond-like instruments as in some countries.