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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

American Depository Receipt/ ADR


Sony wants its shares to be traded everywhere it can - more buyers, more demand, higher-stock price (usually). So instead of just listing its shares on the Nikkei in Japan, Sony lists in the U.S. as well. How? Well, a bank or series of banks essentially buys its shares in Japan and then a nanosecond later turns around and sells them in the U.S. on, say, the New York Stock Exchange for some conversion price. If they are 40,000 yen in Japan, they might be $28ish in the U.S. Note the subtle issue here - not only are investors buying shares in a foreign company but they are buying the shares with dollars and the U.S. investors buying these shares really only care about dollars - so if the yen goes the wrong way and Sony stock doesn't go up to accommodate for it, U.S. investors get doubly hosed.