What is L
L refers to miscellaneous share types when it appears as a fifth-letter extension on a Nasdaq stock ticker. It refers to tickers on the London exchange when it appears as a behind-the-dot extension for tickers listed on Reuters systems. As a standalone letter, L is the ticker symbol for Loews Corporation on the New York Stock Exchange (NYSE).
BREAKING DOWN L
L is a fifth-letter identifier used by the Nasdaq stock exchange to identify miscellaneous share issues not covered or indicated by other extensions. The letter Z serves a similar use. In both cases, shareholders must perform additional research to figure out why the identifier might be attached.
Investors should note that in other ticker systems, the letter L can take on other meanings. For example, Thomson Reuters systems use proprietary Reuters Instrument Codes to identify specific financial instruments on its networks. This system appends codes after a dot, similar to the system used by the New York Stock Exchange’s behind-the-dot system for extensions. On Reuters systems, an L extension signifies a listing on the London stock exchange.
To further confuse matters, Loews Corporation, a conglomerate with interests in several industries, including energy, finance and hotels, uses the ticker symbol L on the New York Stock Exchange.
Situations Covered by Fifth-Letter Identifiers
Nasdaq uses fifth-letter identifiers on stock tickers to differentiate types of common stock issued by a company. These differences could indicate shareholders receive different voting rights, for example the extensions A and B, which designate Class A and Class B shares, or the letter K, which indicates non-voting shares. Other letters denote a shareholder’s place in the hierarchy of creditors, such as in the case of preferred shares.
The L and Z extensions denote miscellaneous situations, which means the reason for their use may not be immediately obvious. Common situations leading to an L extension include the following:
- Certificates of Participation, in which investors in bond issues receive a portion of lease revenues and have no ownership in the underlying bond.
- Participating preferred stock, a type of preferred stock that confers additional dividends under specified situations.
- Stub shares, which get created when a corporation restructures, or when firms convert distressed bonds into equity securities.
Given the wide variety of situations in which Nasdaq might use an extension, investors who encounter such issuances generally should ensure they know exactly what they intend to purchase and how the differentiated rights that apply to these issuances support their investment goals.