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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.
© 2015 by the Indian Institute of Management, Ahmedabad
2015
Indian Institute of Management, Ahmedabad
Licensed re-use rights only. Cases of the Indian Institute of Management, Ahmedabad, are prepared as a basis for classroom discussion. They are not designed to present illustrations of either correct or incorrect handling of administrative problems.
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