Do Branded Ticker Symbols Effect Stock Price?

My good friend Victor Cook has a great new post at Customers And Capital rounding up some analysis of the intersection of branding and stock valuation. Victor has been hard at work on the development of an Enterprise Marketing Framework that establishes the connection between marketing expenses and shareholder value. If you’re not familiar with his work, check into our book discussion and review of his book Competing for Customers and Capital. It covers critical ground for any marketer planning a roadmap to the boardroom.

In his latest post, Victor looks at the impact of ticker symbols on stock performance and digs up some fascinating studies that show a real connection. It turns out naming your stock symbol something memorable–like Southwest’s "LUV"–can measurably improve the performance of your stock over stocks bearing symbols that are easily forgettable acronyms. Exactly why this is the case opens up some interesting avenues of speculation, which Victor outlines before inviting readers to offer their own theories.

Here’s mine: Companies that are savvy enough and confident enough to see their stock symbol as a channel to communicate their brand to investors have a more strategic and holistic view of marketing than companies that see their symbol as just a functional index entry. That makes a semantic symbol a marker for companies with more sophisticated and integrated marketing organizations. What do you think?

Check out Victor’s post. It’s one more stellar example of Victor’s work connecting corporate marketing and finance.

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