What is an ADR, and why is a foreign company's share count different?

Information as of 15 October 2026. The description of ADRs comes from the SEC's Investor Bulletin on American Depositary Receipts, linked below. The part about OQRO's market values is our own method, stated with its date. If anything here is wrong, tell us at contact@oqro.io and we will correct it.

What is an ADR?

The SEC's Office of Investor Education and Advocacy explains in its Investor Bulletin that an ADR is a security that represents shares of non-U.S. companies that are held by a U.S. depositary bank outside the United States. ADRs trade in U.S. dollars and clear through U.S. settlement systems, which lets holders avoid transacting in a foreign currency.

The bulletin says ADRs are created by a depositary bank when the non-U.S. company, or an investor who already holds the underlying shares, deposits them. It also separates sponsored from unsponsored ADRs: a sponsored ADR is one where the foreign company enters into an agreement directly with the depositary bank to arrange recordkeeping, forwarding of shareholder communications, payment of dividends and other services, while an unsponsored one is set up without the company's cooperation.

What is the ADR ratio?

According to the SEC, an ADR may represent the underlying shares on a one-for-one basis, or may represent a fraction of a share or multiple shares. For one company an ADR may represent several shares of the underlying security, while for another it may represent a fraction. The bulletin explains that the use of a ratio allows ADRs to be priced at an amount more typical of U.S. market share prices.

The ratio is part of the terms of the depositary program, and it is not the same for every company. An ADR that stands for five ordinary shares trades at roughly five times the price of one ordinary share in its home market, apart from currency and other differences. A company with a very low share price at home can use a ratio of many shares per ADR to reach a more typical U.S. price.

Why does a foreign company's filing count different shares?

A U.S. company reports the shares outstanding of its stock on the cover of its annual or quarterly report. A foreign company that lists ADRs reports the shares of the underlying company, its ordinary shares, in its own filings. The SEC bulletin notes that when a foreign private issuer lists ADRs on a U.S. exchange it files annual reports on Form 20-F, and that ADRs themselves are registered on Form F-6, which relates only to the contractual terms of deposit and contains no information about the non-U.S. company.

So the share count in the company's filing is a count of ordinary shares, and the price you see on a U.S. exchange is the price of one ADR. Multiplying the one by the other mixes two different units.

What does that do to a market value?

If an ADR stands for five ordinary shares, the company's market value is the number of ordinary shares times the price of one ordinary share, which is the number of ordinary shares times the ADR price divided by five. Without the division, the result is five times too large, and for a ratio of 2,000 it is two thousand times too large.

OQRO ran into exactly this on 14 October 2026: a screener that multiplied the filed share count by the ADR price showed a Chilean airline at about $28.7 trillion. The fix was to read the ratio from the cover page of the filing, where the security title states it, for example each ADS representing 2,000 shares, and to divide. OQRO shows a market value for a foreign company only when the ratio is known, from the filing or from the depositary program, and, where an independent market value exists, that value and the trading volume agree with the result. Where they do not, the screener shows a dash instead of a number.

What this does not tell you

The ratio does not say what a company is worth, and a market value computed this way is a statement of size at one day's price, not a valuation. The SEC bulletin also notes that depositary banks may charge custody fees to ADR holders, so what a holder receives from the company is not identical to what a holder of the ordinary shares receives.

This article does not cover how to buy ADRs, tax treatment, or the differences between the unsponsored and sponsored levels beyond the definitions above. Companies can also change their ratio, which is why OQRO reads it again from new filings. Nothing here is investment advice. To see the filing a number comes from, open the company page and follow the link to its filings on sec.gov; for the checks behind our figures, see the quality page and our methodology.