The financial hieroglyphic known as a stock table can pose a truly mystifying puzzle for the novice investor. Even those with some trading experience may not be familiar with certain shorthand indicators, including the letter D -- which signifies a split that affects the number of shares outstanding, or a new issue of shares.
Ticker symbols represent stock table shorthand for company names. On the New York Stock Exchange, ticker symbols contain three letters; on the Nasdaq and for most over-the-counter stocks, the ticker includes four letters. A ticker symbol makes research easier and more precise. All you need is the ticker symbol -- not the full company name -- to search for a quote and financial information.
When a company splits its stock, it changes the number of shares outstanding, which brings about an adjustment in the price. If you hold 100 shares of a stock that splits 2 for 1, you'll end up with 200 shares. Each share is worth half of what your old shares were worth. Companies do this to make their shares more affordable for retail investors, who might be daunted by a share price that's well into the hundreds. The accounting is done automatically by your brokerage on the date set by the company for the split. The D that appears by the ticker warns anyone researching the company that a stock split is imminent or has just taken place.
A D might also appear next to a stock that's going through a reverse split. In this case, the number of shares gets smaller, and the price gets bigger. In a 1-for-3 reverse split, for example, you receive one share of new stock for every three old shares, and the price of each share triples. The company sets down the time of the split to the minute: South Carolina-based Palmetto Bank, for example, announced a reverse split to take place on June 28, 2011, at 11:59 p.m., and to benefit all shareholders as of that date. Small companies with shares worth only pennies reverse-split their stock to get the price into a respectable range or to get listed on an exchange that has a minimum share price.
The letter D can also indicate a new issue of stock. Seeking to raise capital, companies go to the public stock market to offer their shares. When company stocks (or bonds) appear on stock tables for the first time, the ticker symbol is followed by the letter D. The symbol appears in the quotations issued by the exchange itself. A brokerage quotation, or a quotation appearing in the financial media, may not carry appended symbols. On average, the symbol remains for about 20 business days.
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