Perhaps you’ve heard the news that Twitter is going public. So you see that TWTR is already heading up fast so you but some. There is a trading frenzy. The stock is doubling in price, and then again, and again. Great offering. Just one problem. You bought stock in the defunct Tweeter Home Entertainment Group. It used to trade on the TWTR symbol.
When companies file for bankruptcy, the Financial Industry Regulatory Authority typically adds the letter Q to the existing ticker. That frees up the symbol for potential use by another company. So TWTR became TWTRQ when Tweeter filed for bankruptcy in 2007 (and again in 2008).
Apparently some investors were not paying close attention. The stock skyrocketed 684% on Friday. The price started at 0.018 and closed at 0.05 after rising as high as 0.15. Over 14 million shares had traded.
FINRA stepped in and stopped trading because the trading activity “demonstrated a widespread misunderstanding related to the possible initial public offering of an unrelated security, which … has caused a major disruption in the marketplace.”
Maybe it was just a data entry error that trigger the onslaught with others jumping on board. Maybe someone though Twitter would have to buy the ticker symbol from Tweeter so stockholders could see some value.
The question is why is the stock still hanging around. The company sold substantially all of its assets on July 31, 2007. There was brief and failed revival that blew up in December 2008.Presumably by now all of the AP And AR have run through the system.
I remember Tweeter as the special store to buy fancy and expensive audio equipment. All that hi-fi went away as the difference is sound quality diminished as digital took off. The iPod made the fatal blow.
Now the stock is just hanging around for shady traders and traders who get the wrong ticker symbol.
References:
- Oops! Twitter IPO Frenzy Lifts Defunct Retailer’s Shares by 2200% by Matt Jarzemsky in the Wall Street Journal
- Was The “Tweeter” Stock Mixup A Penny Stock Scam?
Doug,
Like you, I remember going to Tweeter back in the day. What the trading also exposed is the NASDAQ Stock Market’s inefficiency. I understand holding on to the symbol but why wasn’t the system set up to prohibit trades in the stock. You were looking for one of those 5,000 reps from firms that have been disciplined to trade.