A:

W

hen a ticker symbol changes it's usually not a good sign. Tickers of publicly traded companies generally only change for one of four reasons:

  1. The company has merged with another company.
  2. The company had a name change.
  3. The company has been delisted (indicated by symbols such as .PK, .OB or .OTCBB).
  4. The company has filed financial statements late or even gone bankrupt.

When a ticker symbol changes because of a merger, the company being acquired usually gives up its ticker symbol in favor of the acquirer's symbol. Corporate actions such as mergers can often be positive for a company, especially if the company is taken over for a premium over the share price.

Sometimes, a ticker symbol changes because the company has changed its name. For example, when AOL Time Warner dropped the AOL and became simply Time Warner, it changed its symbol from AOL to TWX. A company name change generally doesn't mean much, though you might interpret it as positive sign if it reflects a positive change in the company's overall strategy.

If your ticker symbol has had letters added to it such as .PK, .OB or .OTCBB, this means the stock has been de-listed and is no longer trading on the exchange on which you purchased it, but rather on the less liquid and more volatile over-the-counter market. More specifically, a .PK indicates that your stock is now trading on the pink sheets, while an .OB suffix or .OTCBB prefix represents the over-the-counter bulletin board. A stock that has been de-listed is like a baseball player who has been sent from the major leagues to the minor leagues. For some reason, the stock is no longer worthy of trading on a major exchange such as the New York Stock Exchange or Nasdaq, probably because it failed to maintain the exchange's requirements. (To see these requirements, see What are the listing requirements for the Nasdaq?)

You may have also noticed that Nasdaq-listed securities have four or five characters. In this case, the fifth character often communicates a piece of information, and it can also mean something is wrong with the company. For example, if a "Q" has been added, this means that a company is in bankruptcy proceedings, and "E" means the company is late on its SEC filings. Below is a complete list of fifth symbols on the Nasdaq and what they mean:

A - Class A
B - Class B
C - Issuer qualifications exceptions
D - New
E - Delinquent in required filings with the SEC
F - Foreign
G - First convertible bond
H - Second convertible bond
I - Third convertible bond
J - Voting
K - Nonvoting
L - Miscellaneous situations, such as depositary receipts, stubs, additional warrants and units
M - Fourth class of preferred shares
N - Third class preferred of preferred shares
O - Second class preferred of preferred shares
P - First class preferred of preferred shares
Q - Bankruptcy proceedings
R - Rights
S - Shares of beneficial interest
T - With warrants or with rights
U - Units
VWhen issued and when distributed
W - Warrants
X - Mutual Fund
Y - ADR (American Depositary Receipt)
Z - Miscellaneous situations, such as depositary receipts, stubs, additional warrants and units

RELATED FAQS
  1. Do hedge funds have ticker symbols?

    Discover whether or not hedge funds have ticker symbols, where you can find ticker symbols and the significance of a ticker ... Read Answer >>
  2. What does it mean when a stock symbol has a .PK after it?

    The .PK is an example of a suffix representing where the security is traded - an over-the-counter (OTC) network or an international ... Read Answer >>
  3. What do all of the letters in a stock option ticker symbol mean?

    The option ticker explains four main things about the option: the underlying stock, whether it is a call or a put option, ... Read Answer >>
  4. What happens to a company's stocks and bonds when it declares chapter 11 bankruptcy ...

    Filing for chapter 11 bankruptcy protection simply means that a company is on the verge of bankruptcy, but believes that ... Read Answer >>
  5. If a stock is delisted, do shareholders still own the stock?

    If a company has been delisted, it is no longer trading on a major exchange, but the owners of the company shares are not ... Read Answer >>
  6. How does a company move from an OTC market to a major exchange?

    The over-the-counter market is not an actual exchange like the NYSE or Nasdaq. Instead, it is a network of companies that ... Read Answer >>
Related Articles
  1. Trading

    Keeping Securities Clear With Ticker Symbols

    A ticker symbol is a group of characters that represent a specific, publicly traded security that’s listed on an exchange.
  2. Insights

    The Evolution Of Ticker Symbols

    The stock market has changed dramatically since its inception, but the use of ticker symbols has remained largely unchanged.
  3. Trading

    Understanding The 2010 Options Symbology

    There is a wealth of information in the expanded option symbols, but they should make things easier for traders.
  4. Investing

    The Dirt On Delisted Stocks

    Listed securities are "the cream of the crop". Find out how a firm can lose that status and why you should be wary.
  5. Investing

    Digging For Profitable Delistings

    Deregistration can provide opportunities for savvy investors. We'll show you how to cash in.
  6. Investing

    Understanding Off-Balance Sheet Financing

    For anyone who was invested in Enron, off-balance sheet (OBS) financing is a scary term. Off-balance sheet financing means a company does not include a liability on its balance sheet. It is an ...
  7. Investing

    The Over-The-Counter Market: An Introduction To Pink Sheets

    Being early to a party may not be hip, but being early on a rising stock certainly is.
  8. Managing Wealth

    What You Need To Know About Preferred Stock

    Curious about preferred shares? Here's what you should know about these bond-like instruments.
RELATED TERMS
  1. Ticker Symbol

    An arrangement of characters (usually letters) representing a ...
  2. Hard-Coded Stock

    This is a term that refers to a company's stock symbol or ticker ...
  3. Z

    A Nasdaq stock symbol specifying that the stock is a miscellaneous ...
  4. O

    A component of a stock symbol that indicates the shares of that ...
  5. L

    The fifth character added to a stock symbol listed on the Nasdaq ...
  6. I

    A Nasdaq stock symbol specifying that it is the third preferred ...
Hot Definitions
  1. Agency Theory

    A supposition that explains the relationship between principals and agents in business. Agency theory is concerned with resolving ...
  2. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with a maturity of less than one year. T-bills are sold in denominations ...
  3. Index

    A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is a hypothetical ...
  4. Return on Market Value of Equity - ROME

    Return on market value of equity (ROME) is a comparative measure typically used by analysts to identify companies that generate ...
  5. Majority Shareholder

    A person or entity that owns more than 50% of a company's outstanding shares. The majority shareholder is often the founder ...
  6. Competitive Advantage

    An advantage that a firm has over its competitors, allowing it to generate greater sales or margins and/or retain more customers ...
Trading Center