Sunday, November 29, 2009

Taking Stock

Would you buy shares of company named “Forfeit”?

I did. Well, sort of.

I bought a few shares of an IPO, Fortinet, a company that offers unified threat management solutions. I do a lot of work in the IT security sector, so I thought I’d see how this company does.

Imagine my surprise when I received this notification from my brokerage firm:

At first glance, I was somewhat alarmed to be informed that I was a proud owner of stock in “Forfeit, Inc.”

Wow, that sounds like a great investment!

Look, if I buy into a company with a name like “Forfeit,” I’m definitely going to buy preferred shares, not the common stock.  After all, the owners of the preferred are likely to forfeit less than the common shareholders.

In all seriousness, I think whoever creates prospectus notifications ought to be a little extra careful. Sure “forfeit” *sounds* like “Fortinet,” but did anyone proofread this? I’m sure I’m not the only one who got a little bit edgy receiving this notice.

On the other hand, companies with great solid-sounding names have been failing left and right these days—so maybe it doesn’t matter much.

And who knows? Maybe investment contrarians are actively looking to load up on shares of companies with names like “Forfeit, Inc.”

Hey, if “Ponzi, Inc.” decides to go with an IPO, I might participate!

Posted by Richard Bloch

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