The purpose of this paper is to investigate whether investors prefer stocks with more linguistically fluent tickers (MAK, SOM) to those with less linguistically fluent tickers (WQH, JZU) in an experimental setting.
The author conducts an experiment in which a choice of two hypothetical investments with linguistically fluent and non-fluent tickers is presented to survey participants, who are asked to choose the preferred investment (or indicate that they are indifferent between the investments).
Consistent with investor rationality, survey results indicate that, for both riskless and risky investments, individuals do not exhibit differential preferences for stocks with pronounceable vs unpronounceable tickers. Additionally, individuals are not willing to pay more for former vs latter stocks.
A potential implication is that corporate boards should not attribute high importance to ticker fluency.
