Investor meetings are essential for managing and expanding your shareholder base. They provide investors with clarity on a company’s story and can allow you to gauge potential investor concerns, but most importantly, they provide management the opportunity to control the story being told to investors.
The buy side often views a meeting with management as a critical component in their due diligence process. Even in the wake of increased scrutiny from SEC regulators regarding Reg FD, these meetings give the buy side more insight into a company story, recent developments, and potential headwinds. Continue Reading
Not long ago, I had the enjoyable task of serving as moderator for the recent evening program of the San Diego National Investor Relations Institute (NIRI) Chapter titled “Do’s and Don’ts from the Buy Side and Sell Side.” The panel of two buy-side investors and two sell-side analysts, who cover the technology and life sciences sectors, provided a lively discussion and an abundance of practical advice on the art of practicing effective investor relations (IR). We touched on just about every aspect of IR, from non-deal road shows to the corporate website, and even the perfect length of time for the safe harbor statement on a conference call. Here are some of what the panel considered the top do’s and don’ts for investor relations. Continue Reading
For 31 years running, the mosh-pit that is J.P. Morgan’s Healthcare Conference kicks off the new year. In addition to the more than 400 companies that officially present, the conference attracts countless other healthcare companies looking to meet with the investment community. It is also the only event that attracts sell-side analysts and investment bankers from all corners of Wall Street. Continue Reading
When attempting to articulate the exciting things happening within a business, management teams often rely on buzzwords and catch phrases to grab investors’ attention and paint a picture of the story they’re trying to tell. The problem, however, is that relying on clichés to bulk up your remarks often has the opposite effect. Having listened to thousands of conference calls, investors have heard it all before and view those hackneyed words and phrases as verbal fluff. Listed below are ten incredibly overused buzzwords that may sound exciting to you at first, but when used with investors, will fall on deaf ears. Continue Reading
Hiring an investor relations (IR) firm isn’t easy because it’s not a simple decision. A tremendous amount rides on the relationship you are able to cultivate with investors and shareholders, so you need total trust and confidence in your IR partner.
Making the choice more difficult is that IR consulting firms vary widely, and what gets promised up front doesn’t always hold true. The spectrum ranges from firms that offer IR as one of many services to those that specialize only in IR. While it might seem reasonable to just pick one and get to work, the reality is that the relationship you build with investors and Wall Street represents a core part of your business strategy with a real impact on your perception in the markets.
How can you choose wisely? Finding the right fit takes time and research. IR firms aren’t one-size-fits-all, and the right choice requires you to stop and ask some hard questions, starting with these essential eight. Continue Reading
Over time, all management teams want to build relationships, or at least a healthy rapport, with shareholders. Consistent execution of your business plan and proper communication with current and potential shareholders can help you build credibility, which in turn can bolster your company’s valuation and even allow your management team to earn “the benefit of the doubt” when things are not easy.
Last month, we looked at the top 10 ways companies can build credibility with shareholders. This month, we consider the opposite, and explore common ways companies get into hot water. Here are the top 10 credibility busters you want to work hard to avoid. Continue Reading
“Why is there so much short interest in my stock?” Many executives find themselves asking this question, especially when it seems things are going well. Stocks have been “shorted” for many years now, but there is no doubt that the practice has seen much wider use – and brought about more management frustration – in recent years. Doesn’t short selling expose funds to unlimited losses? Why do investors take the risk?
Much like with negative analysts, the most tempting answer – and biggest misconception – is to believe it is personal. It might be true that your short investors don’t like you. But that is not the reason they put in that short order.
Many early-stage companies need consistent access to capital to invest in growing the business, to fund long-term projects, or for R&D. Over the past few decades, alternate modes of funding have evolved to help public companies raise money more expeditiously. One mode of funding is at-the-market (ATM) financing, which emerged in the 1980s with utility companies looking to raise capital on an ongoing basis. From that time on, companies in a broader range of industries, both large cap and small cap, started using it, and when the market dropped in 2008, the number of companies seeking funding through ATMs rose significantly.
Today, many public-company CFOs and CEOs, especially in biotech/life sciences, consider an ATM financing part of their capital-raising arsenal. When deciding on whether or not to put an ATM in place, it is important to understand how an ATM functions, and the pros and cons. Continue Reading
Sell-side analysts hold big sway with the investment community, and can help your company’s potential to attract investors. To work in your favor, analysts must know the ins and outs of why your company or product represents the next best thing in the marketplace. They also need confidence in your company’s potential to make it to the next level.
While the reputation of sell-side analysts came under fire with conflict of interest stories this past decade, and new regulations helped level the playing field, analysts continue to play powerful roles in the marketplace, and companies are wise to nurture strong relationships. What’s it like in today’s market from the sell-side point of view? And how can you better your chances of making it on analysts’ coverage lists and receiving a coveted “Buy” rating? Continue Reading
Legendary “60 Minutes” reporter Mike Wallace once said: “If there’s anything that’s important to a reporter, it is integrity. It is credibility.” The same should be true for every management team. Credibility with The Street – both on the buy side and the sell side – is an extremely important element in a successful investor relations program. In this month’s Top 10 list, we offer simple practices that help build and maintain corporate credibility.
- First and Foremost: Under-promise and over-deliver.
- Make sure your message and metrics are consistent.
- Provide the appropriate level of financial transparency. Continue Reading