Under Armour Class C Shares (UA.C) Soar On Ticker Change

Shares of Under Armour (NYSE:UA) gained nearly 2.5% in morning trading Monday, but that’s not the big story for investors interested in the sports apparel giant. Indeed, investors are probably looking at Under Armour’s Class C shares (NYSE:UA) , which gained over 8.6% following the news that the company will be changing its tickers in order to fill the value gap between the two stocks.

Under Armour announced that it will change its ticker symbol for its Class A shares to “UAA” and its Class C shares will trade under the old “UA” symbol. The company hopes the move will bring new attention to its Class C shares, which originally debuted in March. Closing the value gap between the two types of shares is important to Under Armour executives because the company plans to use its Class C shares as stock-based compensation in the future.

Heading into the day, Under Armour’s Class A shares were trading at a 20% premium to its Class C shares. Value gaps between Class A and Class C shares typically make sense because Class A share include voting rights, and although that is also true in this case, the vast majority of Under Armour’s voting power lies with CEO Kevin Plank anyway.

Since Class A shareholders have about as much power as Class C shareholders, such a wide value gap really shouldn’t exist right now. Investors are already starting to pile on the company’s under-loved Class C shares, and it will be interesting to see just how close the stocks get before the ticker change goes into effect on December 7.

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