How do companies choose their stock symbols?


Quick Answer

Some companies choose their stock symbols because they make sense as acronyms based on the name of the company, while others choose symbols based on a concept or philosophy. A company can choose any symbol as long as it is not offensive or already in use.

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Full Answer

Southwest Airlines is an example of a company that took a nontraditional approach to its stock symbol. It bypassed acronyms to settle on LUV, in part because the airline originated at Love Field in Dallas, Texas.

Amusement park Cedar Fair uses FUN, and deli restaurant chain Schlotzsky's uses BUNZ. Brinker, which runs Chili's and Macaroni Grill, uses EAT. In 2002, Tricon Global, owners of KFC, Pizza Hut and Taco Bell, went with YUM to project an image of warmth and fuzziness. The company wanted to avoid coming across as too corporate and impersonal.

More-traditional symbols include GM for General Motors, HD for Home Depot and GE for General Electric. Some older companies have a single letter for their stock symbol because one letter made transmitting information via ticker tape easier. AT&T goes by T, Kellogg goes by K and Ford goes by F. However, many single-letter symbols remain available.

The New York Stock Exchange rarely rejects the stock symbols that companies submit. However, companies must also submit second and third choices.

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