The Mispriced ADRs of Allied Irish Bank
Abstract
After the global financial crisis of 2008, Allied Irish Banks (AIB) was rescued by the Irish government. During 2013 and 2014, the tiny fraction of shares remaining with the public appeared to be vastly overvalued in the Irish stock market. The American Depository Receipts (ADRs) of AIB appeared to be overvalued even relative to the inflated Irish price. The case illustrates the possibility of pervasive mispricing in an illiquid market and the difficulty of valuing companies with large embedded option values.
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Acknowledgements
Prepared by Professor Joshy Jacob and Professor Jayanth R. Varma, Indian Institute of Management, Ahmedabad.
Citation
Jacob, J. and Varma, J.R. (2015), "The Mispriced ADRs of Allied Irish Bank", Indian Institute of Management Ahmedabad. https://doi.org/10.1108/CASE.IIMA.2019.000057
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:Indian Institute of Management Ahmedabad
Copyright © 2015 by the Indian Institute of Management, Ahmedabad