Facebook Inc will become Meta Platforms Inc from December after the Sci-Fi term metaverse to reflect its growing ambitions to go beyond daily life, I mean, to go beyond social media into the virtual world. As the social media platform becomes Meta, its stock ticker will change from FB to MVRS. And this has some investors and social media users into a frenzy.

To be sure, a ticker is a symbol, a unique series of letters assigned to a stock. It has four or fewer letters that describe the stock in shorthand.

Why is it a big deal? The end of FAANG

In one universe in the Twitterverse, users are bemoaning the end of FAANG—the acronym used for the stocks of five leaders in their sectors on Wall Street – Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Alphabet (GOOG) (previously Google).

In another universe, users are comparing the new acronym—MANGA—with anime. There are some rooting for MAANA. Some are playing around a bit with Facebook’s new logo and acronym, to get a tropical fruit.

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Jim Cramer of CNBC coined FAANG in 2013 as FANG to describe these dominant companies in their sectors. Apple was added later in 2017 to make it FAANG. Over the years, it had become a go-to acronym for investors and analysts alike to describe these five companies. But as Mark Zuckerberg changes the ticker to MVRS, FAANG’s existence is in danger.

Businesses rebranding themselves is a fairly common phenomenon. What they don’t usually change is tickers. Companies and even investors tend to get attached to them. This is why, whether it is a makeover or a merger, they refrain from changing these all-capital monikers. Think Vodafone Idea. Vodafone and Idea, the two Indian telecom companies merged in 2018, but the ticker of the merged entity remained IDEA.

Think Alphabet. The company changed its name from Google to Alphabet when it became more than just a search giant. But it retained its GOOGL ticker. This is why FAANG continued to be as is.

Why is it a big deal? FB to MVRS

Companies usually avoid changing their tickers when they change names. Besides the fact that investors and analysts become used to them, research has found a stock’s value has a lot to do with the likeability and pronounceability of its tickers.

Two Princeton University psychologists have found that the easier it is to pronounce the name of a company and ticker, the more it influences how well the stock will perform days after its listing.

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Research indicates investors are likelier to purchase shares that can be pronounced easily. The results show people take mental shortcuts even when selecting the stocks for investing. This is especially true for newly listed companies.

However, researchers also add that while these findings are significant, stock names or tickers do not say anything about the performance of a stock in the long term.

As per a report on Wall Street Journal, a study has found that tickers like AAPL for Apple and IBM for IBM score high with investors. So, if companies take a risk of changing their tickers, they stand to decrease ticker likeability and thus the value, at least temporarily.

(Edited by : Abhishek Jha)

First Published:Oct 30, 2021 12:57 PM IST