Shareholder Angst During M&A – Part 1

Maintaining shareholder confidence during acquisitions, divestitures and spinoffs can be challenging.  This may be easier to accomplish for industry consolidators with a track record for growing by acquisition compared with companies growing organically without acquisitions.  Regardless, managing shareholder expectations for the ongoing business while managing expectations for the successful completion of the transaction is demanding. The following is the first of a three-part series about maintaining shareholder confidence through the completion of any transaction which accelerates a change in your company’s investment characteristics. 1)    Common elements of the initial announcement (published November 23, 2014) 2)    Sample questions in preparation for Q&A 3)    Aligning shareholder mix with new investment characteristics The size of the transaction matters in relationship with the exiting business. This is due to the anticipated impact it will have on the company’s investment characteristics, and therefore, the amount of shareholder uncertainty and risk. It is a good idea […] Read more »

Systematically Achieving Remarkable Long-Term Results

Regardless of the size of the organization, investor relations involves the highest level of the corporation in a very public way.  It needs to be strategic, forward-looking, and measurable. The following two resources were developed to help. Applying Analytics to Investor Relations is available on the Resources Page of this web site.  The white paper was later developed into a more comprehensive webcast for Proformative, an international network of accounting, finance and treasury professionals. The webcast titled Analytics:  The MVP on Your IR Team is now part of  Proformative’s recently launched on-line course curriculum for CPE credit.  You will receive a ten percent discount by using the coupon code Proffer10 after clicking on the MVP icon below to access the course.  Please note, you will exit The Heights’ web site as soon as you click the icon. The course covers the basic framework I have used throughout my career to […] Read more »

In Good Company

Monitoring the performance of your company’s peer group on a regular basis provides valuable information toward managing both external and internal expectations. Institutional investors contrast and compare the operating and financial performance of companies offering similar products and services.  Adopting the same practice will help you address any confusion that may exist, create more accurate perceptions and promote informed investment decisions about your company relative to its peer group. Shares of a company’s common stock trade with its peers, industry and overall market.  Assessing how a stock trades relative to its peer group and industry will contribute to more realistic internal expectations for investor relations.  Making a timely course correction to achieve an orderly market for your common stock will earn respect from executive management and the board of directors.  Disrupting IR activities unnecessarily in response to a temporary industry hiccup for which you have no control does not. The […] Read more »

Communicate Without Breaking Your Stride – 3

This is the last of a three-part series about communicating with institutional investors.  Because management accessibility is important to buy and sell decisions, it is highly beneficial to carve out time from running the business to meet with existing and prospective institutional shareholders.  The following offers practical tips for achieving the most from the time you spend with investors while increasing the ease in which you can move from one responsibility to the other without breaking your stride. Make the Time – Decide what percentage of your time you want to dedicate to meeting with the investment community and identify dates of availability before the new fiscal year begins.  Incorporate the dates into your fiscal calendar along with quiet periods, board meetings, company reviews, operational meetings, etc. Advance planning will help prevent scrambling to find an open date when a request for a meeting or conference occurs while helping you […] Read more »

Communicate Without Breaking Your Stride — 2

This is the second in a series of three articles about communicating with institutional investors.  Your shareholder base will change as your company’s investment characteristics change.  Understanding the powerful influence of investment styles will help you anticipate shifts in institutional ownership and modify IR activities to maintain access to the equity market on the best possible terms. The following diagram reflects four broad investment styles.  There are subsectors to each and a couple of hybrids which will be discussed later. It is much easier to manage expectations about your financial performance when the mix of investment styles of your institutional shareholders are aligned with the investment characteristics of your company and its future growth prospects.  Messaging, time allocation and targeting promote an appropriate mix of institutional shareholders. The Growth quadrant includes aggressive growth, core growth and growth investment styles.  Funds managed for growth are seeking stocks of companies expected to […] Read more »