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
V – When 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. Can a business ever be too small to issue commercial paper?

    See why market forces regulate the size of companies that issue commercial paper, even though there are no official regulations ...
  2. How does an underwriter syndicate work together on an initial public offering (IPO)?

    Learn how underwriting syndicates work together when helping a company undertake an initial public offering, and learn about ...
  3. What is the difference between the Sarbanes-Oxley Act and the Dodd-Frank Act?

    Learn about the differences between the Sarbanes-Oxley Act and the Dodd-Frank Act, and understand the reasons why each bill ...
  4. How often should I measure my company's key performance metrics (KPIs)?

    Learn the definition of illegal insider trading while reviewing the people who can be involved and the regulations and consequences ...
RELATED TERMS
  1. Mandatory Binding Arbitration

    A contract provision that requires the parties to resolve contract ...
  2. Mail Or Telephone Order Merchandise Rule

    A regulation that controls businesses that sell products over ...
  3. Contra Proferentem Rule

    A rule in contract law which states that any clause considered ...
  4. Cumis Counsel

    Legal counsel chosen by the insured when the insurer has a conflict ...
  5. TSA PreCheck

    This program allows travelers deemed low-risk by the Transportation ...
  6. Lilly Ledbetter Fair Pay Act

    A federal law designed to ensure equal pay for all workers, regardless ...

You May Also Like

Related Articles
  1. Stock Analysis

    Google Stock: A Tale of Two Share Classes

  2. Investing

    How The NYSE Makes Money

  3. Investing

    Who's Banning Facebook Now?

  4. Investing

    Why Facebook is Banned in China

  5. Mutual Funds & ETFs

    Top 4 High-Yielding Preferred Stock ...

Trading Center