Over the past few months, much has been made of the new MiFID II regulation and the impact it will have on Wall Street, and ultimately, public companies. While it has been in effect since the beginning of the year, we’ve only just begun to experience the impact. We’ve heard stories of lower trading commissions to Wall Street firms; seen buy-side accounts changing the way they compensate sell-side analysts; and caught wind that some of the largest buy-side firms are building out their own corporate access departments.
Many of the MiFID II-related news articles published to date are vague and draw uncertain conclusions about its impact. With that in mind, we want to take this opportunity to outline exactly how we think MiFID II will play out, and provide guidance to senior management to help them thrive under this new world order. Here’s how we see this new regulation snowballing in the coming months.
Not long ago I was surprised to discover that a client of mine that had recently completed a rebranding effort had sent out some messaging to investors under its former name. It turns out that the company was still using its old name with some audiences.
In this case, the company had good reasons to hold onto the benefits of its old brand, so it retained it as a subsidiary to its newly named parent company. And that’s not unusual. Many well-known brands or and products are owned by corporate parents you’ve never heard of (just as many well-known corporations have low-profile subsidiaries or product lines).
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.
We’re often asked by clients and others for ideas on how to liven up their earnings calls. And that’s understandable. Nobody loves earnings calls. They’re tedious, repetitive, and (if things in your business are going as they should) they offer few surprises.
So the desire to make your earnings calls more compelling is certainly reasonable. Still, we always recommend that companies think carefully before they change any aspect of their usual call process just for the sake of change.
Your company’s investor relations website is one of your most important tools for communicating with existing shareholders and attracting new ones. Yet too often the IR website is neglected, with outdated or irrelevant information, multiple versions of the same document, and obsolete design.
The J.P. Morgan Healthcare Conference is a few weeks away, and just about every management team and major investor in the industry understands the crucial role this conference plays in bringing all sides together. Simply put, there is no more important single event of the year within the world of healthcare investing.
But things will be a bit different in San Francisco next month from what attendees have been used to. Over the past few years, with strong equity markets, picking winning investments was relatively easy. As a sea captain once said, a rising tide lifts all boats. But the pullback in the equity markets and uncertainty surrounding the IPO market has changed the climate in which the 2016 conference will take place.
Executives who are both passionate and informed can talk about their companies in great detail and at great length. There are certainly times when elaborate and extended presentations are appropriate. The earnings-day conference call, however, is not one of them.
Last week, we offered some tips on preparing for your earnings calls. Now here are three tips to help you execute an efficient and effective conference call while maintaining proper etiquette.
Once you’ve made the decision to host an investor day, there are a few critical things to accomplish before announcing it publicly — namely, selecting the date, location, and speakers. A well-planned event is much more likely to be a well-attended event. How can you avoid mistakes and plan an effective investor day? Below, I share a few strategies.
Select the right date.
No one wants to send out a “save the date” announcement only to find out that most of your anticipated guests have a conflict. Be careful to consider Wall Street conferences, previously scheduled investor days by companies your covering analysts also follow, and religious holidays. All of these have the potential to prompt an investor to make the tough decision to skip your event and just listen to a replay of the webcast.
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.
Senior management teams are very thoughtful about the financial guidance they provide the Street. Internal and external factors are considered and result in ranges that reflect the management team’s best estimates at the time they are provided. Given the amount of brainpower that goes into crafting the guidance, management teams often become frustrated when their analysts go “rogue” by publishing estimates outside of the guidance range. As a former analyst, I can tell you this happens for a variety of reasons.