The pandemic has changed investor relations, in many ways for the better, for both issuers and investors. When the pandemic first erupted in March and April 2020, there was great concern about the damage and disruption that could occur to the stock market and the valuations of state-owned companies. Indeed, the Dow Jones index fell significantly at the start of the pandemic. Many companies were concerned about their ability to access and raise capital in the months following the pandemic. Many companies and executives rightly worried about the financial future and creditworthiness of their organization.
As summer arrived, however, so did various stimulus programs by the federal government, which injected significant amounts of capital into the US money supply. The Dow Jones hit its previous highs and then started to hit new all-time highs as the IPO and secondary equity markets returned with a revenge that has diminished little as we sit here over a year and a half later.
Equity capital markets remain strong and corporate valuations are generally strong. Still, the pandemic has had a significant effect on SOE investor relations, many of which have been positive for businesses as well as investors. The pandemic has forced the investor relations industry to go largely virtual, with annual company meetings, company presentations at conferences, one-on-one investor meetings, even IPOs and side deals. , all carried out remotely or virtually.
Running virtual roadshows for IPOs and side offerings would have been unfathomable just a few years ago, but is quite acceptable today and has been made possible primarily by technological advancements. The ability for a CEO to present his company’s history and competitive advantages to investors by computer is now commonplace and offers many attractive benefits to businesses and investors. Business leaders now no longer need to travel to major financial centers to meet with investors, saving valuable time, money and energy, and can focus more on corporate operations. business and the growth of their respective activities. Investors can also take advantage of this reality and have better access to CEOs, even if they reside in a city traditionally little visited during public share offerings.
For example, investors interested in participating in a company’s IPO do not have to expect the company to visit their city during the IPO roadshow and can instead access the management team via a call. Zoom one-on-one with executives or by joining a group webinar presentation and then having the opportunity to ask questions to executives after the formal presentation. The benefit for investors here is better access to public company offerings and better access to management, as these meetings can take place virtually. The geographic constraints that historically often prevented investors from participating in IPOs, secondary offerings and non-transaction roadshows are now largely removed. This has been, in a sense, a “democratization” of the IPO and the secondary offering process for investors.
Additionally, the ability for CEOs to virtually present to investors with essentially no geographic constraints means that investors can also have more frequent access to management teams, as CEOs of public companies now also present virtually at conferences – and probably will, to some extent, for the foreseeable future. As a result, an executive who may not have previously presented in person at a conference due to other company commitments or obligations now has the option to set aside 30-60 minutes of their day to present. virtually at a conference, then get back to day-to-day business tasks. For investors, there has never been a better time to access business leaders. For businesses, now is the perfect time to maximize investor exposure by virtually introducing and meeting investors as often as they like.
Another added benefit of IR is the ability for business leaders to better connect with investors. As most investors are required to register their name, company affiliation, and conference email address as part of the registration process, this investor contact information is often shared with the presenting company, whose investor relations team can then follow each investor to send the company. documents and / or schedule a follow-up conference call. This entry of investor details is a mutual benefit for businesses and investors. It allows for future follow-up and engagement if investor interest persists after the conference presentation or meeting.
While the pandemic has essentially forced all businesses to adapt from lectures and in-person roadshows, virtual events are a great, safe alternative for engaging with investors and communicating company history. to a captive audience. Conferences, in particular, are great ways for investors to ask questions of the management teams of companies in which they are considering investing, to directly address their concerns, and for investors to provide critical and actionable feedback to executives. level C of these public enterprises. The benefits to investors of this virtual conferencing access for business leaders are clear and are likely to stay in one form or another.
In addition, the new virtual world of business executives communicating with investors and introducing themselves to investors also benefits investors in unexpected ways: it gives them increased transparency and accountability, as executives tend to be more frequently available. for investors via virtual conferences, webinars and one-on-one meetings. . Investing audiences don’t have to wait for quarterly or annual corporate earnings conference calls as often to hear from company executives or hope to get a one-on-one meeting on a roadshow no deal, because they’re more “front and center” these days. Investors are more likely to ask management a question and to hear from company executives more often, as interactions with the investing public tend to be more frequent through these virtual offerings.
In addition, the pandemic and the reality of working from home have created an opportunity for businesses to engage more with their current investor base and expand awareness to a new audience of potential investors by harnessing the power and the reach of social media. Many companies are leveraging their social media platforms to post industry and company specific content, conduct virtual site tours, and post executive interviews. Since investors typically do not travel to meet with executives in person or to conduct corporate site visits, the use of social media to engage with investors is an essential and powerful tool.
The sudden surge in virtual investor relationships was unexpected and unprecedented, but the benefits are clear. Increased access to the investor community for corporate issuers and expanded communication opportunities for investors to hear directly from companies in which they have an interest are mutually beneficial. The expanded and improved communication opportunities between SOEs and investors are a win-win situation brought about by an unforeseen situation but with unforeseen benefits, which are likely to endure.
Scott Powell is President and CEO of Skyline Corporate Communication Group, which is a New York and Boston-based investor relations agency dedicated to providing IR and corporate communications services to public small-cap companies in all industries and geographies. The firm comprises a high-level team with a combined experience of over 50 years in capital markets, finance, law, investments and management of public companies. The Skyline team has worked with hundreds of small-cap public companies across all industries and is comprised of highly knowledgeable, responsive and effective experts in investor relations and corporate communications for small-cap public companies. capitalization. For more information on Skyline’s investor relations services, please contact us directly, visit our website at www.skylineccg.com and check out our social media pages LinkedIn, Twitter and StockTwits.
This content is provided by Skyline Corporate Communications Group and does not imply RI Magazine journalists.