The absence of a corporate web presence in today’s age is not only inexcusable, it’s devastating. If you don’t have a corporate website and investors (or prospective investors) want to find more information about your business, where will they look? Maybe they will find it somewhere else. In any event, you already have a big strike against you.

For those public companies that do not have a corporate website, I question their rationale for this being the case. Is it that they don’t want investors to be able to readily find their corporate and financial information?  If so, they don’t have a good understanding of what it means to be ‘public’. Or perhaps the rationale is that they simply can’t afford or justify the cost of having a corporate website? Again, if your company can’t afford a corporate website, why are you a public company? 

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On July 7, 2011, a small group of test users were introduced to Google+. In under three weeks it had already grown to over ten million users.  

While prior social projects from Google (Wave and Buzz) were outright failures, Google+ seems to be getting traction. Why? Well there are several reasons. For starters, consider the following:  

• Integration with your existing Google account / profile / Gmail 
• Functionality similar to combining Facebook and Twitter 
• Ability to have a video chat (Hangouts) with up to ten friends at once
• Traffic – think of Google Search, YouTube, Blogger, Maps, etc.

While Google does not want it to be called a replacement for Facebook (and in reality, many users will probably be users of both), the following infographic provides a very interesting comparison, and compelling rationale for signing up for Google+ today.

Infographic originally posted on SingleGrain.com

Think of what would happen if the +1 feature became an integral part of the Google Search algorithm…

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On March 3, 2011, Inside Investor Relations, a blog published by IR Magazine featured an article titled, “Comment: Why IROs shouldn’t use social media”.  The article stirred a few comments from parties that are currently involved in investor relations. Those who commented argued that times have changed since the days of the fax blast and newsfeeds running off the printing press. 

But let’s take a closer look at the merits of what the article itself discussed. 

First, the author indicated that IR practitioners don’t blog or tweet, and “rarely put things in email.” One of the reasons given for this is that using these tools would result in selective disclosure. 

Indeed a growing number of IR practitioners ARE tweeting and communicating through blogs. This may not have been the case in 2007, but times are changing. Some of us move forward, some earlier than others. Others reminisce or even fight to hold on to the past. 

Now let’s tackle the selective disclosure argument. The fear, I guess, is that IRO’s wouldn’t want to discuss anything using social media because it would be to a selective audience. Certainly the author must also be against talking to investors over the telephone, or heaven forbid, in a closed-door meeting. Social media is pervasive and viral by nature. Far less selective than private telephone conversations and one-on-one meetings. 

Perhaps the fear is really that an IRO might be held accountable to what they say if they do in fact use social media. There is some permanency to things discussed on the web and anyone and everyone can see it. Why else would the author discuss her inability to differentiate between “something that is simply interesting to investors and something that is considered material enough to be put in a news release”. Unless, of course, she really can not tell the difference between providing context and disclosing new material information. Yikes. Maybe there is a need for an IRO certification program after all. Intro to IR 101 – What is Materiality? 

I am not even going to bother discussing the silly comment in the article saying that the target audience doesn’t “view company blogs, YouTube and Twitter to track companies.” There have been more than enough statistics put forward in the past two or three years that say otherwise. 

Next, the author goes on to say that communicating with social media and writing blog posts is very time consuming and inefficient – that this time could be better used making ten telephone calls to investors. Hogwash! A well run blog, Twitter account or Facebook Page can save an IRO time. Most of the questions IRO’s get, especially around the time of an announcement, are repetitive. A well aimed blog post just might result in you not having to make those ten calls (or at least they would be much shorter calls). 

Oh, right. Everything you say over a social media channel or blog has to go through a long editorial and vetting procedure with legal.  What about your telephone discussions to a much more selective audience? Or those one-on-one meetings? Surely you are sticking to a script that has been vetted by legal for those calls and meetings too, right? Most likely not. 

Oh, and if you are not disclosing new material information, just making information more readily available and/or providing context, I am sure you can save on some of those legal bills.

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Relationships often start out as mere acquaintances. Then, to move forward, we find common interests, which get people to work together and establish a sense of connection. In short, we prefer helping out people we know rather than extending a hand to strangers. This is the same whether we are talking about choosing a supplier or business partner, as well as hiring and working with employees. If you are an investor relations firm targeting potential clients for your business, you have to be known to them and/or their other professional advisors (ie. Investment bankers, auditors, legal counsel, etc.). 

In strategic relationship building, you determine a certain members or groups of members who might be capable of advancing your business interests. There are some who are passive and unresponsive to the needs of others. Value those relationships that become mutually beneficial while occasionally weeding out those who are passive and unresponsive to the needs of others.

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While small and medium-sized businesses deciding to go public face challenges, including capital requirements and regulatory hurdles, the advantages of public trading status can sometimes far outweigh the disadvantages.  However, once the decision to go public has been made, companies next have to decide whether they will do an initial public offering (“IPO”) or go public through the less glamorous means of a reverse takeover (“RTO”). 

Investopedia defines an RTO as “a type of merger used by private companies to become publicly traded without resorting to an initial public offering. Initially, the private company buys enough shares to control a publicly traded company. The private company's shareholder then uses their shares in the private company to exchange for shares in the public company. At this point, the private company has effectively become a publicly traded one.” 

While it is not quite as simple as that definition would make it sound, it can be a fair amount easier than going public by way of an IPO.  In fact, there are a few advantages for (mainly smaller) companies to go public through an RTO rather than an IPO.  Among the advantages: 

• Shorter timeline – Whereas the process for doing an IPO is often tedious and long, an RTO can be accomplished in a fraction of the time, sometimes measured in weeks or a few months rather than up to a year or more for an IPO. 
• Less stock dilution – With the RTO route, companies can go public without raising much (or in some cases, any) additional funds. 
• Less expensive – With an RTO, road show marketing is often less extensive and underwriting fees substantially lower than for an IPO.  In fact, road show marketing and underwriting fees can be avoided entirely if there is no concurrent financing. 

Companies considering going public via an RTO versus an IPO have to weigh these advantages against the disadvantages of the RTO route, namely, lower liquidity and lower visibility.

Related: Chinese companies acquiring North American listings

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More and more we are all becoming glued to our mobile devices.  We use them to keep track of meetings and appointments, keep up to date with news and brands, and stay connected to friends and business associates.

Last year, more than 63 million people in the United States accessed the web from a mobile device. It’s forecast that by 2013 there will be more than 1.7 billion mobile Internet users worldwide.  This forecast may even be conservative considering there are already 805 million mobile users in China alone, with that figure expected to exceed 1 billion by 2013.  While not all mobile users in China are on the mobile web, the proportion that are will grow rapidly with last year’s introduction of 3G licenses and the predominance of mobile versus landlines.

About 60% of mobile internet usage is spent on social networking.   The leading social networking sites have mobile apps, with a 240% increase in social networking app usage year-over-year (comScore).  Facebook alone has more than 150 million mobile users.

This much is clear – marketers, advertisers, PR and IR folks and website designers can no longer ignore the mobile web.

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All public companies should have a corporate website where investors can find and access pertinent financial, stock and other company information.  This should be a given.  After all, a public company’s information should be just that – public, as well as readily available and easy to find.  Investors intuitively expect to be able to find a public company’s information on your website. And with information coming directly from your company and hosted on your own website, you should assume that investors might reasonably act on that information.  

Surprisingly, you can still find public companies that do not have a corporate website and many more that have corporate websites but with information that is either out of date, static, or at least not updated in real time (or as near to real time as possible). 

If you are a public company and you do not have a corporate website, what is the rationale for this being the case? You don’t want investors to be able to readily find your corporate and financial information?  Or is it that you can’t afford or justify the cost of having a corporate website?  If either of these are true, (at least in my opinion) you shouldn’t be a public company. 

If you just have a corporate website just for the sake of having one and don't care how it looks, how functional it is and how timely the information hosted on it is, it will negatively affect the opinion investors form of your company. 

A well designed, functional and dynamic website will not only impart professionalism, it will also show that you care about your investors. Your investors should be able to trust that the information on your website is credible and timely.  If they can’t trust the information that is coming directly from the company itself, they should not invest in said company. 

And there is no excuse for not having timely information on your website.  The technology is readily available to have news releases, media advisories, financial statements and other filings automatically populated on your website as they cross the news wire and/or are filed electronically with various filing agencies.  If you simply don’t know where to look or know how to make this happen on your website, I recommend you take a look at Q4 Web Systems.

As a public company, it is your duty to keep your corporate website up-to-date with information that investors need to make proper investment decisions.

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Following up on yesterday's post: "CEOs are not allowed to have an opinion, period!", I would like to share an excerpt from Sculptor IR's blog post titled: "Corporate/IR blogs, a disclosure risk or context provider and time saver?"

"The main purpose with the IR blog is not to publish or say anything that you would not say in an investor meeting or in an interview. A blog should instead be used to explain published figures and strategies, helping the analysts and investors to understand your business and financial triggers. With this approach the IR blog will be a great context provider and time saver for the IR-team, providing low legal risk."

Well said!

Blogs and other forms of social media are just another channel for your investor communications. They can be effective at sharing your investment story and connecting with a potentially much larger audience.  Communicating with blogs and other social media is not a substitute for regular continuous disclosure through approved channels, but rather an adjunct to proper disclosure practices. 

At the end of the day, if your disclosure policy allows you to say something to a selective audience (ie. one-on-one investor meetings, retail luncheons, etc.) then you are adhering to better disclosure practices by also making what you say widely accessible to everyone. Blogs and other social media can help you do just that!

Related: 6 reasons to start an investor relations blog

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In a blog post titled "Investor Relations: The Power of a Company Blog", Tom Allinder says: 

“I have had some CEOs tell me that their counsel has advised them not to make any comments in news releases let alone write and publish a blog. Blogging and opinions of any sort are viewed as great risk by many small publicly traded company’s management teams.”

I wonder if their legal counsel also advised them not to participate in any form of one-on-one or other investor meeting not open to the public.  If it is dangerous for CEOs to provide their opinions about what drives the company’s success and how will it grow going forward to the masses via a blog, or even a news release, then surely it must be even more dangerous to disclose such opinions selectively.

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Convinced that LinkedIn is a strong tool for investor relations and wanting to see how a public company can make the most use of its LinkedIn company page, I had a look at some Canadian public companies on LinkedIn.  However, I quickly noticed that none of the LinkedIn pages I looked at for Canadian public companies (and I looked a quite a few) included a stock chart, or at least not the proper one.  In fact, the company pages can be segmented into three groups: (1) company is identified as a Canadian public company but does not have a stock chart; (2) company is identified as a Canadian public company but the stock chart displayed is for a U.S.-listed company with the same ticker symbol; and (3) dual-listed company but the stock quote is only for the U.S. listing.  

After some digging, and with some assistance from Darrell Heaps at Q4 Websystems, it was discovered that the TSX was not a supported exchange on LinkedIn.  I found this surprising given that the TSX is the third largest stock exchange in North America by capitalization, and in the top ten worldwide.

If the folks over at LinkedIn simply do not know where the TSX is, it's headquartered in Toronto, the same city LinkedIn has plans to open a sales office in shortly. 

Here are a few prior posts on using LinkedIn for IR:

The relevancy of LinkedIn for IR

Using LinkedIn as an IR tool

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The majority of investors rely on some formal analysis when making their investment decisions.  For public issuers, sell-side coverage is valuable for attracting investors who might not otherwise have you on their radar screen. Establishing formal research coverage should always be a priority for a public issuer.  

But what is a small-cap company to do? 

In general, the sell-side focuses more on larger-cap companies, due, at least in part, to the larger flow of trading commissions.  As a result, many smaller companies have fewer sell-side analysts covering their stock.  In fact, obtaining sell-side research coverage can be one of the biggest challenges for small-caps.  

While many small-cap companies try to make up for their lack of sell-side coverage by paying for written research from independent providers, paid for research simply doesn’t measure up.  For starters, the credibility of paid for research is often in question (most companies paying for research are only going to post, or pay for, positive reports).  In fact, according to research by Marcus Kirk at the University of Florida, “paid-for analysts issue relatively less accurate forecasts and more optimistic recommendations than sell-side analysts.”  Add to that, paid for research simply does not have the leverage of sell-side research – the sales force. 

Persistence pays off 

It might be more difficult and it might take considerable time for small-cap companies to win the attention of the sell-side, but persistence can (and from my experience, does) pay off.  To increase your chances, in addition to strong business fundamentals, you need to make sure your investment proposition is compelling and effectively communicated to the right audiences.  Simply put, the investment in a well-executed investor relations strategy with an emphasis on building relationships with the sell-side is time, money and effort well spent. 

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As an investor relations consultant you will most likely, at some point, come face-to-face with a client who expects you to be able to drive trading volume and share price, even in the absence of any real corporate developments.  This recently was the case of a friend of mine at another firm.  During a meeting with one of his clients, the client explained to him that they were not satisfied with the IR firm’s efforts to drive volume and price of their stock, which, as is often the case, they felt was under-valued.  What the client was looking for was more IR activity, specifically, meetings with prospective investors. The logic seeming to be: more meetings = higher trading volume and share price appreciation.  

A closer look at the company revealed that it had done little in terms of actual operational performance to improve its stock performance.  The company was well behind on previously communicated growth objectives and had not communicated any updates with respect to progress or revised timelines.  Being a relatively new public company without an established track record, combined with the mismanaged expectations and lack of announcements, I fail to see how management could expect that more investor meetings would maximize shareholder value – let alone why prospective investors would want to meet with said company under these circumstances.  

The bottom line is that a company has to perform.  If you’re not performing, don’t blame your stock’s performance (or lack thereof) on your investor relations consultant.  As much as we would like to believe, we can’t move mountains.

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We have all heard the old adage, "it's not what you know, it's who you know that counts." In today’s age of tools like Twitter, LinkedIn and others, many online networkers seem obsessed with how many connections, followers and friends they are able to show on their social media profiles, with some indicating on their profiles that they are open to accepting friendship requests from everyone.  However, I am sure most would agree that “who you know” is far more relevant than “how many you know”.  I would much prefer to be a part of a small but highly engaged network of professionals rather than having a “network” of hundreds or even thousands of people I don’t know.  

The bottom line here: People with strong networks get more things done more effectively than people with large, loose networks with little in the form of member engagement.  

Remember, to keep your network engaged, keep your connections up-to-date.  Let your network know what you’ve been doing lately and have planned for the near term.  Status updates on LinkedIn and Twitter are great for this.

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A quality investor relations website is a valuable dissemination tool that can inform and influence opinion.  Given the size of audience that it is possible to reach, it pays to develop the most content rich site possible. Having rich, up-to-date content is key to building a quality investor relations website.  The most oft cited frustration for online audiences is out-of-date information.  Posting new content as soon as it is available, periodically reviewing all content for relevance and checking links to ensure that older information is still accessible are all ways to increase user satisfaction. 

With increasing competition for investor dollars, a robust, user-friendly IR section can support the generation of new interest in your company while at the same time ensuring that existing shareholders have quick and easy access to the information they require.  A quality IR website can also “level the playing field” among issuers as it is relatively easy (and relatively inexpensive) for a smaller issuer to provide the same level of information to investors as a larger one. 

The website and all other electronic disclosure media should be considered an extension of your normal disclosure practices and are therefore subject to the same laws, rules and regulations.  At least in Canada, the corporate website is not a substitute for regular continuous disclosure through an approved newswire, but rather an adjunct to proper disclosure practices.  The IR section should provide a constant flow of valuable supplementary information to all investors on a regular basis, keeping them well informed and allowing them to make quality investment decisions. 

Recommended reading: Website disclosure means more and better communication

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Are Canadian-listed companies based in or focused on China more likely to embrace using social media for investor relations?  And, if so, why?  Well for starters, when your business operations are on the other side of the world, rich media including videos, podcasts and slide presentations, and more frequent updates can help North American investors understand your company, while feeling more at ease by being able to see (even if not first hand) what they might be investing in.  Added benefit for investors --- time and money saved from making less business trips to China.

See the full gallery on Posterous

A few examples:

http://twitter.com/Cantronic ;

http://twitter.com/BoyuanGroup ;

http://twitter.com/ChinaWindPower ;

http://grandpowerlogistics.posterous.com 

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If 19,386 portfolio managers (1,528 in Canada), 13,398 investment advisors (3,107 in Canada) and thousands of analysts, traders and bankers were simply not relevant enough for you to consider LinkedIn as an investor relations tool, the site's new "Follow Company" feature just might do the trick. 

The "Follow Company" feature lets you "tap into key goings-on at nearly a million companies that already have their company profiles on LinkedIn and more that are being created every day."

Now, in addition to IR professionals having the ability to connect with their audience on LinkedIn, the audience can follow public companies of interest.  Regardless, you need to keep in mind that the value in using LinkedIn has always been about networking and managing relationships.  After all, shouldn't that be a key part of investor relations?

You can also read my earlier posts on this subject:

The relevancy of LinkedIn for investor relations

Using LinkedIn as an investor relations tool

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The key to a successful annual meeting is planning and preparation – not days or weeks, but months in advance.  Companies must be prepared for shareholder activism, potential control contests and expressions of shareholder discontent with management – all of which could significantly impact the annual meeting. 

Whether the issue is say on pay, board composition, stock option related or another matter, companies should begin their communications with their proxy materials, particularly their management information circular (“MIC”).  In addition to being a regulatory document, the MIC provides an opportunity to communicate the strategic rationale in support of proposed resolutions.  While the MIC communicates how the company feels its shareholders should vote, it is critical that companies know who their shareholders are – gaining insight into their concerns and who influences their voting decisions.  This is best accomplished through regularly communicating and meeting with significant institutional and retail investors throughout the course of the year. 

However, companies need to go beyond just knowing their shareholders, they need to gain insight into how their shareholders intend on voting on various resolutions at the annual meeting.  If there is a potentially contentious issue on the ballot, companies may want to consider proxy solicitation.  Companies should also be in regular contact with their transfer agent to monitor proxy voting leading up to the meeting date.      

Recommended reading: “Annual Meeting Hot Buttons: New Survey Pinpoints Executive Compensation, Other Investor Issues IR Must Address” via IR Alert April 14, 2010.

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The look, feel and substance of the annual shareholders meeting has changed significantly over time.  Once extravagant affairs with hundreds in attendance, lured by the prospect of hearing management deliver a major announcement or discuss a new course of direction, they are now, with the odd exception, far more perfunctory events borne of legal necessity.

However, the annual meeting remains one of the single most important opportunities for public companies to address their shareholders.  While the anticipation of a major announcement has waned in our world of continuous disclosure, today’s investors look to management to provide their strategic insight into the company’s long-term vision and growth plans at the annual meeting – more so than to discuss the previous year’s challenges and successes.

Competition for investment dollars remains very competitive.  Companies need to communicate what sets them apart from their comparables and effectively articulate how key achievements, the company’s investment proposition and growth strategy combine to build shareholder value.  The management presentation given at a company’s annual meeting is a key opportunity for communicating this message to the most engaged shareholders.  

The annual meeting may never return to its glory days of yesteryear.  But perhaps the ability to have live online voting and being able to pose questions online during live meetings will give annual meetings a much needed shot in the arm and bring back the retail investor.  For more on this subject, I encourage you to read “More U.S. companies choosing virtual annual meetings” posted by Dominic Jones.

Also liked: “Who Killed the Annual Report?” by Joann Sondy.

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