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Dual-Class Stocks: Can They Serve as Effective Predictors?

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  • Veli Safak

Abstract

Kardemir Karabuk Iron Steel Industry Trade & Co. Inc., ranked as the 24th largest industrial company in Turkey, offers three distinct stocks listed on the Borsa Istanbul: KRDMA, KRDMB, and KRDMD. These stocks, sharing the sole difference in voting power, have exhibited significant price divergence over an extended period. This paper conducts an in-depth analysis of the divergence patterns observed in these three stock prices from January 2001 to July 2023. Additionally, it introduces an innovative training set selection rule tailored for LSTM models, incorporating a rolling training set, and demonstrates its significant predictive superiority over the conventional use of LSTM models with large training sets. Despite their strong correlation, the study found no compelling evidence supporting the efficiency of dual-class stocks as predictors of each other's performance.

Suggested Citation

  • Veli Safak, 2023. "Dual-Class Stocks: Can They Serve as Effective Predictors?," Papers 2310.16845, arXiv.org.
    • Handle: RePEc:arx:papers:2310.16845
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    References listed on IDEAS

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    6. Ingmar Nyman, 2005. "Stock market speculation and managerial myopia," Review of Financial Economics, John Wiley & Sons, vol. 14(1), pages 61-79.
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