2/1/22, 3:41 PM Confused investors keep buying FORD, thinking it's Ford - CNN

MARKETS see all FEATURED

DOW +1.17% The US economy in 12 charts

S&P 500 +1.89% From jobs to GDP, these key indicators provide a
comprehensive, up-to-date picture of the US Economy.
NASDAQ +3.41%

Confused investors keep buying FORD, thinking it's Ford

By Paul R. La Monica, CNN Business
Updated 1648 GMT (0048 HKT) August 12, 2019

New York (CNN Business) — Just about every time Ford Motor makes big news, some investors mistakenly buy
shares of Forward Industries, a tiny maker of carrying cases for medical monitoring systems and other
electronic devices.

That's because Forward Industries (FORD), which is worth just $10 million, trades under the ticker symbol
"FORD." The iconic Ford Motor (F) has the ticker symbol of "F."

This, and other examples of ticker symbol confusion, may cost investors more than $1 million a year in
transaction costs, according to two professors who have studied what happens when investors buy the wrong
stocks.

Those costs add up for average investors trying to save money for retirement or other long-term goals.

"Most investors don't reverse the incorrect trade until a week or more," said Andrei Nikiforov, assistant professor
of finance at Rutgers University-Camden. "That's how long it takes for the stock price to return to normal,
probably once investors realize they made a mistake."

Nifkorov wrote a research paper on the topic with fellow assistant professor Vadim Balashov. They found some
investors didn't even wind up selling the stock they incorrectly bought. Instead, they just rationalized the
purchase as still being a good investment.

'HP' is not the printer company or Hewlett Packard Enterprise

HP confuses investors too. When either of the two tech companies that were part of the original Hewlett
Packard tech conglomerate are in the news, shares of oil services company Helmerich & Payne (HP), which
actually trades under the ticker symbol "HP," often moves in the same direction. PC company HP's ticker
symbol is "HPQ" while Hewlett Packard Enterprises trades under "HPE."

Snapchat parent Snap (SNAP) and tool maker Snap-on (SNA) often get confused. Newly public web
conferencing firm Zoom Video (ZM) and Zoom Technologies (ZOOM), which is a thinly traded Chinese wireless
company, are often mistaken for one another. And iPhone maker Apple (AAPL) and Apple Hospitality REIT
(APLE), a real estate firm that owns hotels are, often mixed up.

Bankrupt electronics retailer Tweeter Home Entertainment

soared nearly 1,000% in 2013 after Twitter (TWTR) filed to
go public. That's because Tweeter's ticker was "TWTRQ"
and Twitter had registered for "TWTR."

https://edition.cnn.com/2019/08/12/investing/ticker-symbol-confusion/index.html 1/3
2/1/22, 3:41 PM Confused investors keep buying FORD, thinking it's Ford - CNN

The 'smart' money often gets

confused too
It's not just small-time mom and pop individual investors
who get mixed up. Ticker confusion also can upend
sophisticated institutional investors, Nikorov and Balashov
found.

"The biggest surprise was finding that there was also a

Related Article: Zoom nearly reaches $16 surge in institutional volume, that big money managers
billion in value after first day of trading also participate in the confusion trade," Nikorov said.

Nikorov and Balashov assumed retail investors would be

making most of the mistakes. But Nikorov told CNN
Business that the rise of algorithmic trading is probably the reason big mutual funds and hedge funds get
fooled.

"Computers scan for stocks and look for ones in play. So if there is [an] unexplained move, the algorithms don't
look for a reason. They just jump on the bandwagon," Nikorov said.

So how can investors avoid making this type of mistake? Of course, investors buying stocks need to do their
own due diligence. The onus is on them to make sure they are purchasing the right stock.

But Nikorov said that the SEC and the exchanges could do a better job of warning investors about stocks with
similar ticker symbols, especially since he and Balashov said they found that over 55% of publicly traded firms
share some meaningful part of a name or symbol with other companies.

Nikorov said the most efficient way to warn investors is for the SEC or exchanges to provide online brokerage
firms with a list of these stocks so the brokers can add warnings any time an investor is looking to buy a stock
whose name or ticker is similar to another.

The SEC, New York Stock Exchange and Nasdaq were not immediately available for comment.

Search CNN...

World

US Politics

Business

Health

Entertainment

Tech

Style

https://edition.cnn.com/2019/08/12/investing/ticker-symbol-confusion/index.html 2/3