Automotive behemoth Ford Motor will release it’s Q3 earnings on October 24th, and when it does, countless investors will scramble to purchase shares of stock ticker “FORD.”
Only one problem…
“FORD” is the ticker symbol for “Forward Industries,” a manufacturer of “carrying cases for medical monitoring systems” worth $10m — not the $40B car company listed under ticker symbol (F).
And we thought the newsletter industry was niche…
In fact, experts estimate that this mistake costs investors an average $1m in trading fees alone. Most investors don’t even catch the mistake until at least a week later, and some never correct it at all, “they just rationalized the purchase as still being a good investment,” one researcher writes.
This is just the short list — Professors at Rutgers identified “250 company pairs where the possibility of confusion is particularly high.”
Big institutions that rely on algorithms to watch for big movements in stocks often get tripped up when a bunch of poor proofreaders dump money into the wrong companies.
Computers don’t ask why a bunch of investors are suddenly optimistic about a defunct stereo seller, they just execute. That means the responsibility falls on investors to “spellcheck” their holdings, whether they’re a basement daytrader, or a hedge fund hotshot.