IPOs from companies with easily pronounced names p
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Posted On: 03/07/2019 5:20:10 AM
IPOs from companies with easily pronounced names perform better than others. That's not what I was searching for but nevertheless it popped up in search results. So, apparently people prefer investing in things that they can pronounce. Stock tickers that were more easy to pronounce were 33% more profitable after an IPO.
VERB is certainly easy to pronounce. But why VERB ? That was my thinking when I first read the new company name. After pondering it a bit though I came to think that the new name is kinda neat. Partly because it's the only grammar-related company name that I could find which makes it unique. There is no company trading under a symbol such as NOUN or ADJ (for adjective ).
But my guess is the choice of this name has more to do with an attempt at "verbifying" the company name. Think google, xerox or photoshop - all of those company or product names have been turned into verbs.
Interesting article by a Mr. Hoban: Google This: What It Means When A Brand Becomes A Verb
Quote:https://www.princeton.edu/news/2006/05/29/stu...panys-name
A new study of initial public offerings (IPOs) on two major American stock exchanges shows that people are more likely to purchase newly offered stocks that have easily pronounced names than those that do not, according to Princeton’s Adam Alter and Danny Oppenheimer. The effect extends to the ease with which the stock’s ticker code, generally a few letters long, can be pronounced -- indicating that, all else being equal, a stock with the symbol BAL should outperform one with the symbol BDL in the first few days of trading. ...
“We looked at intervals of a day, a week, six months and a year after IPO,” Alter said. “The effect was strongest shortly after IPO. For example, if you started with $1,000 and invested it in companies with the 10 most fluent names, you would earn $333 more than you would have had you invested in the 10 with the least fluent.”
VERB is certainly easy to pronounce. But why VERB ? That was my thinking when I first read the new company name. After pondering it a bit though I came to think that the new name is kinda neat. Partly because it's the only grammar-related company name that I could find which makes it unique. There is no company trading under a symbol such as NOUN or ADJ (for adjective ).
But my guess is the choice of this name has more to do with an attempt at "verbifying" the company name. Think google, xerox or photoshop - all of those company or product names have been turned into verbs.
Interesting article by a Mr. Hoban: Google This: What It Means When A Brand Becomes A Verb
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