The Curse Of The Obvious Ticker

by: Paulo Santos

Now, what I am about to say is more of an empirical observation. It's just that it seems like every other stock whose ticker reveals that a lot of thought went into choosing it, seems to have a great big blunder at some point.

It just seems that when one company goes too far in trying to make its own ticker easier to remember and recall, that's a sign that it's more interested in promoting the company's stock market performance than in creating value for the shareholder through old-fashioned earnings. Sure, this is a bit far-fetched, but there are a few other similar "theories" out there that have been empirically validated over time.

This is something analogous to the headquarters curse, where a company is so filled with hubris that it plans and builds a giant new headquarter, and disaster strikes right after.

Or the magazine cover curse, where the moment a long running trend sees its praises sung in a large circulation magazine, the trend reverses. Or a variant, where your CEO is named CEO of the year, and the stock rapidly turns south.

Or maybe even two other less known "curses" -- those that result from buying naming rights for a stadium, or the hubris implicit in taking out an expensive commercial in the Superbowl (something did).

Real-World Examples

What really brought my attention to this curious matter was Boingo Wireless' (NASDAQ:WIFI) performance (or lack of it) today, with its -24% move as I write this. But I could also think of Shanda Games (NASDAQ:GAME) over the past two years. And perhaps SodaStream (NASDAQ:SODA) would be another example, however I have some doubts there, since the ticker is present in the company's name.

What Other Candidates Are Out There?

One stands out -- (NYSE:CRM), which is overvalued and riding the cloud computing bubble. For those familiar with the industry, CRM is the acronym for "Customer Relationship Management." Sure, sells a hosted CRM solution, and that makes up the large majority of its revenue base. But still, wanting to get that particular ticker when CRM was much more "en vogue" than it is today, makes it seem like the company was simply paying too much attention to the market. This is an impression that continues to this day, when goes as far as changing the duration of its contracts just to influence the bookings measure because it knows analysts are looking at it.

Maybe is even a three strike offender. After all, not only did it choose a dubious ticker, but it also paid for a "Chatter" commercial during the Superbowl, and it was recently planning a huge new campus/headquarters, though it eventually shelved those plans (after acquiring the land for them).


If the company you're thinking of investing in seems to have put too much consideration into choosing the ticker it trades under, take that as a warning flag.

Finally, if you remember other famous tickers, leave them in the comments!

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.