Thursday, September 12, 2013

Now you tell me

Fill everything up.
On average, companies with short, simple names attract more shareholders, generate greater amounts of stock trading, and perform better on certain financial measures than companies with hard-to-process names, say T. Clifton Green of Emory University and Russell E. Jame of the University of Kentucky.
Bad choices: National Oilwell Varco and Freeport-McMoRan Copper & Gold. 
A 1-step increase in name "fluency" on a 5-step scale, such as reducing name length by 1 word, is associated with a 2.53% increase in market-to-book ratio, which would translate to $3.75 million in added market value for the median-size firm. 
Selecting an easy-to-process company name is a low-cost method for improving investor recognition and increasing firm value, the authors say.

Fewer words are better in any setting.

For example, if you need venture capital:
To maximize the chances of raising venture capital, company names that are six to ten characters in length see the most deals. This is pretty expected. In particular, companies whose names are seven characters in length saw the most financings and actually saw higher median deal values than their brethren with six, eight, nine and ten characters in their name. So when in doubt, go for 7 characters in your name.
Good luck.

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