The Royal Dutch-Shell premium doubled during the 1998 crisis

Evidence

Consider, for example, the premium of Royal Dutch stock over Shell stock, which, as noted above, LTCM expected to decline. In 1997, the premium had been around 8 percent. During the early months of 1998 it started to rise for unclear reasons, and during the crisis it shot up, at times exceeding 17 percent. — Donald MacKenzie, An Engine, Not a Camera, 1053

Categorization

• XREF: The Royal Dutch-Shell dual-listed company premium is a canonical example in both the mispricing literature (Froot & Dabora) and the performativity debate about convergence arbitrage.