Nasdaq Is a Three-Letter Word

While doing some research the other day, I came across tiny TGC Industries (Nasdaq: TGE), which provides seismic data to oil and gas exploration companies. I did a double-take when I saw that it had a three-letter ticker, yet was listed on the Nasdaq (Nasdaq: NDAQ) exchange.

From time immemorial, stocks listed on the Nasdaq had four or five letters in their ticker symbols (and if they had five, there was a reason for it), while New York Stock Exchange stocks had one, two, or three. Same with the American Stock Exchange. And if a stock moved from one exchange to the other, it had to conform to the new exchange's standards. Discount broker Charles Schwab (Nasdaq: SCHW), for example, added the "W" to its NYSE ticker when it made the move to the Nasdaq exchange back in 2005.

Well, no more. Last July, the SEC approved a measure under which companies that already had a three-letter symbol on another exchange could migrate to the Nasdaq and continue using it. The new rules specifically discussed three-letter tickers, not those with one or two -- so although you shouldn't expect too much change, you can also expect three-letter symbols to begin proliferating at the Nasdaq.

This move has been in the works for a while now. Although it might seem like a small matter, it's actually a high-stakes game for the exchanges. No longer is it enough to say that one exchange can trade shares more efficiently than the other. The Nasdaq and the New York Stock Exchange, in fact, trade shares nearly equally. And the revenues they derive from the listings are substantial. NYSE Euronext (NYSE: NYX) generated $1.2 billion last quarter from the 3,892 companies listed on the New York Stock Exchange and Euronext, while Nasdaq generated $652 million from the 3,100-plus companies on its exchange.

Stealing stock listings from rivals has a long tradition on the exchanges, and it was long rumored that the NYSE had held the letter "M" in reserve, in case Microsoft (Nasdaq: MSFT) ever decided to make it to the Big Board. However, when Federated Department Stores changed its name to Macy's (NYSE: M) last year, it was given that designation.

Delta Financial became one of the first three-letter companies on the Nasdaq when it moved from the AmEx with the ticker DFC. But it was a special situation that occurred before the rule change. Since its bankruptcy filing, however, Delta has been removed from the exchange and now trades on the Pink Sheets.

So far, I've found only a handful of companies making the switch, one of them being satellite- television provider DirecTV (Nasdaq: DTV). Here are the others that have joined the Nasdaq, most within the past month:

It's a topsy-turvy world when even the staid bounds of exchange ticker symbols can't be counted on anymore. What we can count on are more ticker migrations coming.