𝗖𝗮𝗽𝗶𝘁𝗮𝗹 𝗠𝗮𝗿𝗸𝗲𝘁𝘀 / 𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿 𝗥𝗲𝗹𝗮𝘁𝗶𝗼𝗻𝘀 𝗶𝗻 𝗧𝘄𝗼 𝗠𝗶𝗻𝘂𝘁𝗲𝘀 𝗼𝗿 𝗟𝗲𝘀𝘀
𝗗𝗼 𝗬𝗼𝘂 𝗢𝗻𝗹𝘆 𝗦𝗽𝗲𝗮𝗸 𝘁𝗼 𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝗪𝗲𝗮𝗿𝗶𝗻𝗴 𝗣𝗶𝗻𝗸 𝗦𝗵𝗶𝗿𝘁𝘀 𝗧𝗿𝗮𝗱𝗶𝗻𝗴 𝗼𝗻 𝗧𝘂𝗲𝘀𝗱𝗮𝘆?

Any Investor Relations Officer (IRO) can relate to the most basic conundrum of Investor Relations; how do I interact with all of the shareholders across my investor base?

Sometimes IROs are overwhelmed with investor requests, negative sell-side analysts, and sometimes really difficult investors.

If an investor does not fit a certain mold, the IRO may be reluctant to engage.

𝗦𝘂𝗽𝗲𝗿 𝗦𝗮𝘀𝗵 𝗪𝗶𝗻𝗱𝗼𝘄 𝗖𝗼𝗺𝗽𝗮𝗻𝘆

Anyone who grew up in Chicago is familiar with the culture of cringy and outlandish commercials.

Eagle Man, Peter Francis Geraci, Empire Carpet, and Victory Auto Wreckers, among others.

By far the best and most obscure is Super Sash Window Company from 1982.

Picture a man in a leisure suit trying to sell you replacement windaz.

Two things stand out:
You would probably never buy any windaz, and
The windaz likely come with an offer you cannot refuse.

Often times IROs avoid conversations because an investor does not fit the mold.

When someone does not fit the mold, the reaction is to discount the viewpoint or not engage.

𝗗𝗼 𝗬𝗼𝘂 𝗢𝗻𝗹𝘆 𝗧𝗮𝗹𝗸 𝘁𝗼 𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝗪𝗲𝗮𝗿𝗶𝗻𝗴 𝗣𝗶𝗻𝗸 𝗦𝗵𝗶𝗿𝘁𝘀 𝗧𝗿𝗮𝗱𝗶𝗻𝗴 𝗦𝘁𝗼𝗰𝗸𝘀 𝘁𝗼 𝗧𝘂𝗲𝘀𝗱𝗮𝘆𝘀?

Everything starts with market capitalization.

Companies with market cap north of $10B typically have the luxury of picking and choosing investor relationships.

Large / Mega Cap Companies can choose to only speak to investors wearing pink shirts and trading stocks on Tuesdays because their underlying stocks have natural drivers of ownership.

Liquidity, and
Index membership, which translates into a need to track performance.

Conversely, as market cap becomes smaller, the need to take an agnostic approach to investor relationships increases immensely.

Smaller companies lack natural drivers to ownership; therefore, Management and Investor Relations need to create drivers of ownership.
Smaller cap companies need to have great earnings materials, a strong investor deck, and good investor communication.

A consistent and regular focus on answering key investor debates through the investor materials represents the primary way companies can manufacture drivers of ownership.

Smaller companies taking an agnostic approach are typically successful.

The key is allowing the universe of investors to find you on their terms and then meet them where they are and communicate in order to change perceptions or drive deeper engagement with the story and stock.

Enterprising IROs good at engaging difficult or cantankerous investors are extremely valuable. These IROs can provide stability and unlock significant shareholder value.

𝗞𝗲𝘆 𝗟𝗲𝗮𝗿𝗻𝗶𝗻𝗴𝘀

If you are a CEO or CFO and find yourself trying to avoid meeting top shareholders, be careful.

Once an executive starts avoiding top shareholders, said executive’s tenure will likely end shortly thereafter.

While cringy, sometimes you just have to dial 588-2300, for that Empire Carpet to get the job done right.

Sometimes interacting with investors outside of your preferred mold yields the greatest change and deepest long-term relationships!