Classes of common stock
Some corporations issue different classes of common stock that
can have different characteristics. For example, Bershire Hathaway,
Inc., has class A and class B common stock. One share of class A
common stock is convertible (at the option of the shareholder) into
30 shares of class B common stock.
Some companies issue tracking stocks, which are a class of
shares tied to the performance of a part of the business of the
company. Atracking stock is a separate class of stock that tracks the
performance of a part of a business within a company. General
Motors was the first company to issue this type of share in 1984 and
1985 for its subsidiaries Electronic Data Systems and Hughes
Electronics. In 1999, Donaldson, Lufkin & Jenrette (ticker symbol
DLJ) issued a tracking stock for its Internet brokerage business DLJ
Direct. The Internet brokerage company competed with DLJ for
business; this created a potential conflict for the board of directors
of DLJ, which served both sets of shareholders. Despite the potential
conflicts when the same board of directors serves two sets of
shareholders with different interests, several companies (such as
General Electric Co., Walt Disney Co., and DuPont Co.) have
issued tracking stocks. The other disadvantage for shareholders is
that some tracking stocks do not come with voting rights.
The advantages of tracking stocks are that companies retain
certain tax advantages, and the tracked businesses are connected
to their less risky parent companies. Tracked businesses have the
necessary room to conduct their business operations and also have
the support of their parent corporations.
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Categories in Trading Mistakes
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Lack of Trading Plan
Planning plays a key role in the success or failure of any endeavor
Using too much Leverage
Determining the proper capital requirements for trading is a difficult task
Failure to control Risk
Refusing to employ effective risk control measures can ensure your long-term failure
Lack of Discipline
A lack of discipline can destroy even the most talented and best prepared trader
Useful Advices to Beginning Trader
You can control your success or failure
All about Stocks
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