Throughout my 23 years as an institutional salesperson, I had the pleasure to host many interesting and successful investor meetings.
Very few of those meetings went badly, because I always made a point to educate the companies I was traveling with in advance of the meeting. My goal was to make sure the management team had a complete background on the investor they were meeting and a deep understanding of that investor’s investment process and philosophy. I even tried to ensure that the management team knew about any investor’s personality quirks so they would not get thrown off their game during the meeting. Investors can sometimes try to intentionally rattle management teams in order to get them to say things they were not planning to say.
There’s never a better time than the present to chart your investor interaction strategy over the coming months. What investors do you still need to meet with this year – including follow-ups to initial meetings you’ve already held, and meetings with new investors with whom you haven’t yet connected?
Do you have plans for which conferences to attend, new KOLs to contact, or for attracting new sell-side research?
Of course, all of this consideration needs to be prioritized within the context of your company’s upcoming catalysts: clinical trial progress, data readouts, product approvals, product launches, potential financings, growth target bogeys, and other various metrics investors will use to gauge your progress.
When you get a question from an investor or analyst that seems to be from out of left field, it makes you wonder what the underlying intention is. It may be that the questioner is just new to your story.
However, the questioner could also be heavily shorting your company or long your biggest competitor. The question could be awkwardly phrased or come across as a bit sneaky because the investor is trying to get you to elaborate on an answer or provide more detail on a topic than you have in the past.
The CEO and CFO are the public faces of any company. After all, they are primarily responsible for delivering the organization’s message during earnings calls and investor presentations and interacting with investors during road shows.
However, no great company is comprised solely of just two C-level execs, regardless of how talented they are. The importance of maintaining a solid management team below the CEO and CFO — quality operating officers and division heads, for example — cannot be overstated.
Sometimes, corporate leaders tell us that they are reluctant to meet with hedge funds. Such apprehension is fueled in many cases by concern that hedge funds may be looking into their company for the sole purpose of shorting their stock.
While we understand a preference to meet with long-only funds, we recommend that companies maintain a consistent dialogue with hedge funds.
We’re often asked for advice on managing quarterly quiet periods successfully, so that management can focus on tying up financials and developing good messaging for the earnings call and press release.
A well-thought out and consistently applied quiet period can provide a much-needed respite from investor communications for management around busy quarter ends. But one reason for confusion about them is that, unlike quiet periods following an IPO, which are closely regulated by the SEC, end-of-quarter quiet periods are more loosely defined and not strictly regulated.
Another J.P. Morgan Healthcare Conference has come and gone, and this year’s event was perhaps the most hectic yet. Despite the busy schedule, the Westwicke Partners team returned energized by what we heard in San Francisco.
After dozens of meetings with a lot of great companies, two things in particular became clear to me. One is that healthcare stocks seem poised for a better 2017 than they had in 2016. Another is a potential increase in M&A activity. In fact, we woke up on the first day of the conference to the news of United Healthcare acquiring Surgical Care Affiliates. Who knows if this theme will continue through the rest of the year, but many of the quality companies we had the opportunity to chat with this week could be attractive targets to both strategic investors and the sponsor community.
Development-stage healthcare companies typically need to raise money every one to two years. As they grow, they typically attract larger and more varied forms of financing until the time comes for them to either be acquired or go public. Many companies will opt to run a dual-track strategy at such a time to maximize the value that has been created.
But what if the market isn’t quite ready for your IPO, as we saw throughout most of 2016? How can you keep your development engine running while waiting for the right market conditions to make your debut as a public company?
As much as CEOs and CFOs know that they should focus on the long-term performance of their stocks, it’s impossible not to at least notice and wonder about day-to-day, hour-to-hour fluctuations, especially when they seem arbitrary and divorced from fundamentals.
Trading before the market opens and after it closes can be particularly confusing. For instance, outside of the regular market session, spreads can widen dramatically (see chart).
Failing to plan, the old saying goes, is planning to fail. This is certainly true when it comes to your investor relations strategy. Yet even though strategic planning is every bit as important to your IR success as it is for every other part of your business, we find that many companies fail to plan correctly, if they plan at all.
IR planning is about delivering the right story to a well-defined audience, and about refreshing your message in a way that will continue to resonate with investors. Every good annual plan starts with the same question: What do you want to be different at the end of the year? So it’s vital to articulate your goals before formulating a strategy.