Business

Pandora IPO Gives It a $3 Billion Valuation, Single-Letter Ticker

The music streaming service started public trading at nearly $25 a share

By Adam Clark Estes
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Wednesday morning, Pandora will debut on the New York Stock Exchange at a higher price than expected. Like LinkedIn did before its blockbuster initial public offering, the company ratcheted up its initial price range first from $7 to $9 then to $10 to $12 before finally completing the offer at $16 per share, raising $235 million for the streaming music service. In its first public trades, Pandora rose further starting at nearly $25 a share on the New York Stock Exchange raising its market cap past $3 billion.

With a valuation nearly 20 times the amount of last year's sales and anxiety about, investment experts have mixed feelings about how the so-far unprofitable Pandora will perform and more tech bubble warnings have been issued.

Pandora is also the first Silicon Valley-area company to score a single-letter ticker symbol, "P." Coincidentally, Zillow, a Seattle-based real estate listings start-up will debut on Nasdaq Wednesday, also with a single-letter ticker symbol, "Z." Until fairly recently, single-letter ticker symbols were reserved for only industry titans like AT&T ("T" for telephone) or Ford ("F," obviously, for Ford), however the practice has changed in the era of the digital market. Veteran traders say the symbols matters little nowadays, but the history behind the ticker symbol is neat.

Stock symbols date back to the invention of the stock telegraph ticker by Thomas Edison in 1870. Just as today, the symbol was used as universal shorthand for the name of the stock, and in order to save time, the shorter symbols were assigned to the blue chip stocks that were trader more frequently, like U.S. Steel ("X"). The respective markets would assign symbols based on availability, and as the stock exchange became more crowded over time, the single-letter symbol became quite coveted. Only when a company was acquired or failed did the symbol open up, which also led to the single-letter denoting success.

Today, companies can request their desired symbol when applying for an initial public offering. The New York Stock Exchange allows for the top three choices but guarantees nothing. Nasdaq previously didn't offer single-letter symbols, and according to one myth, the New York Stock Exchange purposefully reserved the symbols "I" and "M" to lure Intel and Microsoft away from Nasdaq--though that was debunked in 2007 when Macy's took "M." That same year, the Securities Exchange Commission changed the government's regulation on stock symbols allowing single-letter symbols on Nasdaq under a single letter, but Zillow is the first to win the privilege.

The list of companies trading under single-letter stock symbols now ranges from blue chip mainstays like Citigroup ("C") to lesser known tech companies like Agilent Technologies ("A"). Now that "P" and "Z" are taken there are five unclaimed single-letter symbols. Here's the full list:

This article is from the archive of our partner The Wire.