What’s in a name? Ask American Superconductor Corp, a stock that today is up 57%, with no apparent underlying news to justify such an increase. Well, there does exist somewhat related news — an announcement by a group of Korean scientists that they may have invented a room temperature superconductor — however the discovery as of this moment is still doubtful, and even if true, seems somewhat tangential to the underlying business.
This is just the latest example in a long-litany of companies that have benefited from a name connected to the next big thing, dating back to at least the great depression. In the early 1930s, there was an overall boom in airline stocks. This was good news for a company inaptly named Seaboard Air Line. According to Life Magazine,
the price of Seaboard Air lines, even thought it had recently undergone bankruptcy, advanced along with many plane stocks under a public belief that the company is an airline. Actually, the Seaboard Air Lines Railroad Company, its full name, is a railroad.
The story can be somewhat verified in the data — CRSP data for Seaboard Airlines shows the stock price trippleing from $.31 a share in march 1933 to $2 a share in July 1933, along with a massive increase in share volume. Around this time there is also a boom in volume and price of other airline stocks.
More recently, we saw the insane birth of Long Island Blockchain (née Long Island Ice Tea), a soft drink company that pivoted to the “blockchain” and saw its stock price commensurably increase by 200%; “Zoom Technologies” benefited from its connection to the Zoom videoconferencing company, to the tune of a 100% increase; Tweeter Entertainment confused for Twitter ; in March 2017, Snap Interactive soared 164% after the social-media company Snap Inc. filed to go public; the confusion of the Corona Beer Brand with the Coronavirus ; and a litany of .com companies that similarly benefited by the newest fad.
