When Charlie Regan decided to take public his mobile IT services company, he knew right away what ticker symbol he wanted the stock to trade under: NERD.
“That’s what the team is,” said Mr. Regan, the CEO of Nerds on Site Inc., which services small- to medium-sized businesses. “They’re nerds.”
To his surprise, the ticker symbol was still available. “We were all quite shocked,” he said. “We locked it down right away.”
Nerds on Site, which closed its initial public offering on the Canadian Securities Exchange (CSE) on Nov. 26, is one of a batch of companies getting creative with their stock tickers. Clever symbols can serve a marketing purpose, making the company memorable to investors and advisers, though they are no guarantor of financial success.
Canada started allowing four-character symbols in 2016; before that they were limited to three. “That gave rise to quite an explosion of creativity," said Richard Carleton, the chief executive of the CSE. "Adding four characters has given people a significantly bigger canvas to paint on.”
Cannabis companies have seized the opportunity to have some fun with their ticker symbols. Medical marijuana producer Canopy Growth Corp. changed its ticker to WEED last year, while Nutritional High International Inc., a producer of edibles and other cannabis products, trades on the CSE as EAT. (On the U.S. over-the-counter market, it’s SPLIF.) It seems only a matter of time before a company claims POT, the former ticker of Potash Corp. of Saskatchewan, which changed its name to Nutrien Ltd. after a merger at the start of the year. The ticker can be reassigned to a new company as of February.
The advent of the four-letter symbol in Canada allowed Alderon Iron Ore Corp. to claim IRON, for e-commerce software provider Shopify Inc. to switch to SHOP and for Bay Street investment firm Onex Corp. to trade as, simply, ONEX.
Some exchange-traded funds have also been taking advantage of the additional character length. Evolve ETFs offers a number of cleverly named products that trade on the Toronto Stock Exchange, including a marijuana fund with the ticker SEED, an automotive fund that trades under CARS and a gender diversity index with the ticker HERS.
Erik Sloane, head of business development and funds at the Neo Exchange, said that for some companies, using a creative stock ticker can be a marketing strategy.
“Having a name that people can remember when they’re looking for something is a way to occupy some brain space, but it’s not a predictor of success for a fund," Mr. Sloane said. “You can have some of the craziest names do nothing at all and just flop over.”
The practice has been commonplace in the U.S. for years, where the Nasdaq has long allowed four-letter tickers. Gibraltar Industries Inc. trades under the symbol ROCK. Cedar Fair Entertainment Co., an Ohio company that runs amusement parks including Canada’s Wonderland in suburban Toronto, trades as FUN.
Geoff High, director of investor relations for DMC Global, said the company was known as Explosive Fabricators Inc., with the ticker XFAB, when it went public in the 1970s. In the late 1980s, it changed its name to Dynamic Materials and went with BOOM.
“It is so descriptive of our business. I can tell you the stock symbol has just been a very effective tool for capturing the attention of investors. When you’re competing with 4,000 other publicly traded companies for the attention of investors, a memorable ticker symbol is certainly helpful," Mr. High said.
“I’ve talked with a number of portfolio managers running screens, and they’ll come across our symbol and they’re, like, ‘I have to figure out what this company does.’ It’s a real asset.”
The company’s legacy businesses go back to companies associated with Alfred Nobel, the inventor of dynamite. “It’s nice to be able to talk about our connection with the history of explosives.”
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