Holding company tracks operating company?

[Combo]

Does anyone know how this works? The holding company is listed in the US and owns all the shares of the operating company which trades on AIM.

The chart of the holding company mirrors that of the operating company but with less liquidity. The market caps are the same adjusted for currency.

Is this mirroring done automatically or would it ever be possible to grab shares in the holding company at a large discount to the market cap. of the operating company?

 

[Dommo]

Anyone making either market will be watching both issues and adjusting quotes automatically. It would be a free money arb, right? I doubt you could squeeze anything out of of it.

If you're interested there used to be a price mismatch between Royal Dutch/Shell listings - I'm not sure whether it was really tradeable as it went on for years.

 

[NVP]

Anyone making either market will be watching both issues and adjusting quotes automatically. It would be a free money arb, right? I doubt you could squeeze anything out of of it.

If you're interested there used to be a price mismatch between Royal Dutch/Shell listings - I'm not sure whether it was really tradeable as it went on for years.

not to us mortals ............

 

[scose-no-doubt]

The market value of the holding company's assets and therefore company's value by way of net asset valuation, is the listed price of the shares in the subsidiary.

 

[Combo]

So it seems to be determined algorithmically or at least through regular/constant monitoring.

I am trying to purchase shares in a holding company but the market maker is widening the spread to 30%, valuing the company higher. I'm wondering if they are allowed to tick up the price on continued buying volume if the result is that the market cap of the operating company would subsequently lag behind?