The rise and fall of single-letter ticker symbols

Abstract

A single-letter stock ticker symbol is a limited resource – only 26 possibilities are available in a stock universe of over 475,000 possible one-, two-, three- or four-letter ticker symbols. These symbols were first allocated based on trading volume therefore some of the most important companies at the time were initially placed into this group. This paper examines the history of this group of stocks and documents a decline in the importance of these firms due to a natural turnover in commercial leadership and no established mechanism to remove the single-letter designation from firms that lost their prominence.

Keywords:

• ticker symbols
• American big business
• New York Stock Exchange

Acknowledgements

The author would like to thank Bing-Xin Lin, Karyn Neuhauser, Henry Oppenheimer, Pamela Stuerke, the editor (John Wilson) and an anonymous referee for helpful comments. Excellent research assistance was provided by Paul Fowler. All errors and omissions remain the responsibility of the author.

Notes

1. Nasdaq changed its system to allow DFC to retain its three-letter symbol when it transferred from the American Stock Exchange on March 22, 2007.

2. The DJIA was created using 12 stocks on May 26, 1896. It was expanded to 20 stocks in 1916 and to 30 stocks in 1928.

3. The market capitalisation of the two companies with single-letter ticker symbols on Amex comprise less than 0.1% of the total Amex market capitalisation in 1974. The three Amex companies in 1984 represent less than 0.2% of the market capitalisation of that exchange in 1984.

4. Tables at the midpoint of each decade from 1925 to 2004 are available upon request.

5. The number of transactions may be a more appropriate measure of volume. Unfortunately, this data is not available until the 1980s.

6. Results are available upon request.