American Depositary Share


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American Depositary Share (ADS)

Foreign stock issued in the US and registered in the ADR system.

American Depository Share

A certificate issued by an American bank representing a share of a foreign stock the bank holds in trust but that is traded on an American stock exchange. An American depository share is dollar-denominated and entitles the bearer to any dividends and other benefits associated with the single share underlying it. In other words, an American depository share is a single share of an American depository receipt.

American Depositary Share (ADS)

A negotiable U.S. depositary share that represents securities of a non-U.S. company being held in custody. A custodian bank in the issuer's home country holds the foreign shares. An ADS is traded in U.S. dollars in the U.S. markets, and dividends are paid in U.S. dollars. American Depositary Shares are traded in lieu of the underlying foreign securities that remain in custody. See also sponsored American Depositary Receipt.
Case Study Trading of American Depositary Shares boomed in the early 2000s, largely because of the increased number of ADSs available to U.S. investors. Foreign companies issued American Depositary Shares as part of their effort to raise funds in the booming U.S. capital markets. Some ADS issues originated from foreign-based corporations with U.S. operations that wanted to offer dollar-denominated ownership shares to their U.S. employees. Foreign companies sometimes issued ADSs to use in acquiring U.S. firms in equity transactions. For example, British Petroleum paid for its acquisition of Chicago-based Amoco Corporation with newly issued American Depositary Shares. These shares offer U.S. investors the opportunity to achieve international diversification without the investors being required to convert dollars for a foreign currency and vice versa. American Depositary Shares also offer liquidity that often surpasses the liquidity of the same firm's ordinary shares. Actively traded ADSs in U.S. markets include Alcatel (France), BP (United Kingdom), Ericsson (Sweden), Nokia (Finland), Royal Dutch Petroleum (Netherlands), and Telefonica (Spain).

American depositary share (ADS).

When a company based overseas wants to sell its shares in the US markets, it can offer them through a US bank, which is known as the depositary.

The depositary bank holds the issuing company's shares, known as American depositary shares (ADSs), and offers them to investors as certificates known as American depositary receipts (ADRs). Each ADR represents a specific number of ADSs.

ADRs are quoted in US dollars and trade on US markets just like ordinary shares. While hundreds are listed on the major exchanges, the majority are traded over the counter, usually because they're too small to meet exchange listing requirements.

References in periodicals archive ?
M2 PHARMA-March 9, 2015-Amarin expects USD52.8m from private placement of restricted American Depositary Shares
BANKING AND CREDIT NEWS-February 18, 2014-Barclays PLC purchases American Depositary Shares
Under the deal, Mountain Tiger International acquired Bona Film for a cash consideration equal to USD 27.40 per ordinary share of the company or USD 13.70 per American depositary share of the company, on the basis that two American depositary shares shall represent one share.
Under this discretion the Board of HSBC Holdings plc has decided upon a dividend of USD0.3875 per Series A American Depositary Share for the quarter ending 17 March 2014 to holders of record as of 28 February 2014.
Each American depositary share (ADS) of Tudou, each of which represent four Tudou Class B ordinary shares, will be cancelled in exchange for the right to receive 1.595 American depositary shares (ADS) of Youku, each of which represents 18 Youku Class A ordinary shares.
The company has offered to issue 5.0m new ordinary shares in the form of ordinary shares or American Depositary Shares. Each American Depositary Share represents one ordinary share of the company.
The airline has said that it will change the ratio of its ADR programme from one American Depositary Share (ADS) representing two preferred shares to one ADS representing one preferred share.
Hexindai announced that the board of directors of Hexindai has declared a cash dividend of 40c per ordinary share, which is equivalent to 40c per American Depositary Share , or ADS, each of which represents one ordinary share.
Shanda Games Limited (Nasdaq:GAME), an online game developer, operator and publisher in China, reported today that its board of directors has approved a one-time cash dividend of USD0.51 per Class A or Class B ordinary share, or USD1.02 per American Depositary Share (ADS), each of which represents two Class A ordinary shares.
The change will be from a ratio of one American Depositary Share (ADS) representing two preferred shares to a ratio of one ADS representing one preferred share in the airline.
Luxfer Holdings plc's (Luxfer Group) (NYSE:LXFR) board of directors authorised an interim dividend of USD0.125 (before deduction of depositary fees) per American Depositary Share (USD0.125 per ordinary share of GBP0.50 each (ordinary shares)), the company reported on Tuesday.
Under the deal, Advanced Semiconductor will pay NTD 55 per common share (or NTD 275 per American depositary share).

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