It’s that time of year again, when management teams start looking ahead to figure out and plan strategically for a successful next year. What will drive your investor relations (IR) strategy in 2015? What can you learn from your efforts this past year? How do you decide where to focus your investor interactions, and what strategies can help you balance the push and pull on your time?
Here, our team of IR experts at Westwicke answers these and other questions, and shares advice to help you create a top-notch investor relations plan that aligns with your company’s goals and priorities.
There’s a saying in investor relations: “You date your investment bankers, but you marry your research analysts.” Essentially, this means that most sell-side analysts who cover your company will remain your partner for the long run. Investment bankers, on the other hand, work with a long list of companies and deal with jam-packed, demanding schedules. They don’t disappear after the initial public offering (IPO), but the time they can devote to your company diminishes.
The opposite happens for sell-side analysts: after the IPO, the time they spend interacting with your management team and learning about (and talking about) your company increases. Sell-side analysts are at every quarterly earnings release, at many investor conferences, and if they sponsor a non-deal road show, they should be by your side at those events, too. The most effective relationships with sell-side analysts are, in theory, like those of married couples: full of back-and-forth interaction and long-term.
The buy side is structured in many different ways, and knowing the set up and style of your audience is critical both to your pre-meeting preparation and to the level of detail you provide when you answer questions — and whether you take a more quantitative or qualitative approach.
The general buckets to understand are portfolio manager and analyst, but the roles and focus areas of these key players can differ, depending on the institution. So start by asking these questions:
In the months that follow the successful completion of an initial public offering (IPO), some companies have a hard time striking a balance between under- and over-communicating. This happens, in part, because the final week of the IPO road show is one of the most frenetic and adrenalin-pumping periods in the careers of any management team, and being back in the office after so much excitement can feel like a letdown.
To fill that void, some management teams react by getting right back out there (once the 25-day quiet period has expired) to tell their story to the same or new investors all over again. At Westwicke, we advise rethinking that strategy and taking a more balanced approach. Consider these tips and real-life scenarios from the field to help you determine the right mix.
Completing an initial public offering (IPO) is a major milestone for your company, and a journey that involves many months (and in some cases years) of hard work and dedication. As you likely know, the timeline ends with the pricing and allocation of your IPO — a process that is short in duration but one of the most important steps in your path to becoming a public company.
What do you need to know about the pricing and allocation process to help you act in the best interest of your company and shareholders? Below, I walk you through the associated primary concepts.
One of our clients, a recently public diagnostics company, settled an ongoing royalty dispute with a major pharmaceutical company. The settlement amount was significantly lower than what our client had accrued, resulting in nearly $750 thousand upside to their P&L in the upcoming quarter.
The company assumed they needed to issue a press release in addition to the Securities and Exchange Commission’s (SEC’s) disclosure Form 8-K, but was a press release really merited?
Even great companies with excellent management teams will face the inevitable challenge of having to communicate bad news to Wall Street. In a previous blog post, my colleague Tom McDonald discussed how to handle missing a quarter, but what about other results that can have a material impact on your business in the future?
In the healthcare industry, a number of things can go awry — a clinical trial that doesn’t meet your primary endpoint, a setback in your product’s regulatory approval process, a change in reimbursement policy, or a delay in your product launch date due to a manufacturing issue. Effectively communicating these scenarios with the Street can mitigate adverse reactions to your company’s reputation — and to your share price.
The road to an initial public offering (IPO) can be long and arduous, and when not well planned and executed, subject to many missteps. Consider what happened recently to the Israeli biotech company, Vascular Biogenics (VBL Therapeutics). The company went public with an offering of 5.4 million shares. Less than a week later, the underwriters, Deutsche Bank and Wells Fargo Securities, LLC, terminated the offering when an existing shareholder did not fund payment for shares it previously agreed to purchase in the offering, according to a VBL Therapeutics press release.
While VBL’s pullback is clearly a draconian scenario, other mistakes abound as companies move toward an IPO. What are the most common mistakes on the path to an IPO? How can your company prevent them, and what can you do if you’re already in the thick of them? Our team of experts at Westwicke tackled these questions recently in a round-table discussion. Here are excerpts of the conversation.
Bookrunners play a significant role in the execution of a successful IPO transaction. Too often, though, a private company CEO does not fully appreciate the importance of selecting the right bank(s) to lead their IPO. It is vital to find the bookrunner(s) with the right combination of capabilities, experience, and “fit.”
Here are seven key considerations for evaluating potential bookrunner(s) for your IPO:
An investor day is a perfect opportunity to get the public up to speed on your corporate story, but compiling the appropriate guest list can be tricky. Having coordinated nearly 100 investor days as a firm, we know exactly who you should be targeting to attract the perfect audience for your event.
Current shareholders and covering analysts
First, and perhaps most obvious, you should invite your current shareholders and your covering analysts. These two groups have a vested interest in understanding every aspect of your business and will be most engaged and active in the discussions during the event. Additionally, given their relationships with your company, this group will show the highest attendance rate.