Companies planning to go public need to be able to hit the ground running on the day of the IPO pricing with an investor relations program.  In order to prepare, Sharon Merrill President and Partner Maureen Wolff provides tips on what to do before and after the S-1 filing in the videos below.

What to do before filing an S-1

What to do after filing an S-1

Maureen Wolff is president and partner at Sharon Merrill.  Maureen leads the implementation of the firm’s strategic vision and provides high-level strategic counsel to clients. She is a past chairman and board member of the National Investor Relations Institute (NIRI) and a current member of NIRI’s Senior IR Roundtable. She also is a past president and honorary director of NIRI’s Boston Chapter.  

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To kick off the New Year, we decided to renew an old Sharon Merrill tradition and take a lighthearted look at what’s in and what’s out in investor relations and related areas in 2012.  Hope you enjoy, and have a happy and successful 2012.

Jim Buckley is an Executive Vice President and a Partner at Sharon Merrill. He oversees the implementation of investor relations programs and provides strategic counsel to clients on a broad spectrum of communications issues including shareholder activism, acquisitions, proxy contests, investor day planning, earnings guidance, institutional ownership trends, analyst interactions and Sarbanes-Oxley compliance. Jim’s clients represent a cross-section of industry, including economic and financial consulting, energy, environmental, life sciences and technology.

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As another year comes to a close, two things are probably on every IRO’s mind: New Year’s resolutions and next year’s investor relations plan.  Every year, one of the most common resolutions is to get fit.  People spend a tremendous amount of time and money developing new health and fitness plans to achieve that goal.  This year, apply the same techniques to your IR plan in order to have a successful 2012. 

Establish Achievable Goals

You may not be ready to compete in the Arnold Classic body building competition next year, but fitting into that new bathing suit by summer is certainly a realistic goal.  When developing your 2012 IR plan, set equally realistic expectations.  For example, expecting to grow your capitalization from a mid-cap to a large-cap in just a few months is likely an unrealistic benchmark.  Instead, focus on more achievable metrics, such as meeting with a greater number of investors, attending more conferences, or increasing trading volume.  Meeting these goals will support your ultimate goal of maximizing shareholder value.

Be Consistent

Unfortunately, there is no pill that you can take to achieve instant weight loss or meet your desired fitness results.  It requires old-fashioned hard work and a healthy diet.  Similarly, you need to work just as hard on your outreach strategy every day in order to drive measurable IR results.  Develop a long-term calendar of IR events and stick to it.  Don’t make excuses for not attending events.  Just because the most recent earnings weren’t stellar, doesn’t mean you should avoid attending an upcoming investor conference.  Also, investors do not typically buy in after just one meeting, so be sure that you have a follow-up strategy in place to keep analysts and potential investors abreast of new developments.  Have a working pipeline of news releases in place to serve as updates on your company’s strategic progress. 

Use Supplements

In fitness, there will always be a debate over how effective supplements, such as energy drinks or protein shakes, are at improving your results.  Some swear by them while others prefer to go supplement free. In investor relations, service providers are like supplements that can help support the effectiveness of your IR program.  For example, there are many new social media products out there, and it can be confusing when determining which are best. In addition, there are other service providers that can help with investor targeting, arranging meetings, stock surveillance, video production, etc. Test them out to determine the most effective provider to help you meet your goals.  Remember: there is no “one-size-fits-all” IR program.

Hire a Trainer

At the gym, even the experienced athletes can benefit from working with a trainer. Consider the possibility of engaging an IR firm. It is often valuable to get an outside perspective on how to improve your program to drive better results. IR consultants can help you transition from being reactive to proactive in your IR outreach efforts.  There are a number of firms out there, so make sure the one you select understands your goals and that the chemistry is right.  After all, you will need to welcome them in as a trusted partner in order for them to be most effective.

Measure Results

Everything comes full circle.  Whether it’s monthly, quarterly or annually, you will need to measure your results. In fitness, you can track your progress by measuring weight loss, improved stamina, changes in your diet, etc.  Most importantly, at the end of the year you need to ask yourself if you feel fit and healthy.  Measuring results also are important in IR.  A recent study by NIRI of investor relations professionals found that 73% set specific goals and objectives for their plans, with 79% doing so on an annual basis.  The success of an IR program can be measured on everything from relationships with the investment community to the growth of the company’s social media following. Produce a results report on the metrics you determined at the start of the year and deliver it to management and your board, if possible.  Use these results to develop your plan for the following year.

Keep these five steps in mind as you think about your New Year’s IR resolutions and where you want to be at the end of 2012. Challenge yourself, physically and professionally — and get fit in 2012. 

Dennis Walsh is Senior Consultant & Director of Social Media at Sharon Merrill.  He counsels clients on a broad array of investor relations and corporate communications issues such as market research, competitive intelligence, earnings announcements, investor targeting, roadshow planning and social media.

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*Originally appeared on OpenView Labs, the strategic and operational consulting arm of OpenView Venture Partners, a global Venture Capital fund that invests in expansion stage technology companies.

“In preparing for battle, I have always
found that plans are useless, but
planning is indispensable.”

                                                        – Dwight David Eisenhower

President Eisenhower could well have uttered the same quote about Crisis Communications.  Developing a crisis communications plan is more about planning to mobilize for a potential crisis, than it is about writing step-by-step actions for specific pre-ordained scenarios.  And this is what causes so many management teams to be confused about exactly what the components of a good crisis communication plan actually are.  Here are five “Crisis Plan Essentials” to consider in order to get your team ready to communicate in a crisis.

1)      Identify the Crisis Team

It’s important that the right people from the appropriate functional areas of the organization are ready to respond at a moment’s notice to a crisis and understand their responsibilities as members of the team.  Along with the CEO and CFO, the team should include key people from public relations, corporate communications, investor relations, human resources, public affairs, sales and marketing. Make sure that at least two members of the crisis team have been media trained.  A major crisis is no time to get your feet wet in media relations.

2)      Constantly Assess Your Primary Risks

Forward-thinking companies take a strategic approach to crisis communications by continuously assessing the risks associated with their businesses.  The key to this effort is to establish a risk-aware culture and a process whereby employees can funnel their ideas about potential risks through management to an appointed member of the crisis communications team. For each risk, the team should assign responsibility for continuous monitoring and assessment, taking actions to mitigate risk when possible.  

3)      Develop Messaging Around the Key Risks

Once you have begun assessing your key risks, your team will be prepared to be prepared.  Develop messages that could be used as talking points or as the basis of potential news releases related to each of your primary risks.  Of course, when a crisis strikes, the devil is often in the details in terms of the actual communications.  So be prepared to calibrate your messaging to address the nuances of the actual crisis.  The messaging you develop in advance will give you a head start at a critical time, and will provide you with more flexibility than a pre-written news release that will not take the intricacies of the crisis into account. 

4)      Create an Internal Contact Roster

Nothing exacerbates a crisis like not being able to reach management or vital members of your team at a critical juncture.  Develop a comprehensive list of every possible contact point for all members of the crisis team so they can be mobilized as quickly as possible.  And keep it up to date!  This may sound simple – perfunctory even – but many crisis teams have lost precious time because a cell phone changed or the number to a beach house had been left off the list.  Include all business numbers (direct and main), home telephone numbers, cell phones and work and personal email addresses. 

5)      Know Your Stakeholders (and how to reach them)

Maintain the current contact phone numbers and email addresses of all of your company’s major stakeholders.  This step is surprisingly skipped by many companies because they mistakenly believe the numbers can be easily located.  But in a crisis there just isn’t time, for example, to make calls to a potentially hard-to-reach salesperson to find the right contact at your largest customer.  Be sure to have all of the possible contact information for the following audiences:

• Local, regional and trade media
• Investors/Analysts
• Customers/Partners
• Suppliers/Distributors
• Local government officials
• Community leaders

Plan for every Murphy’s Law moment, and make sure that each team member has electronic and online access to the contact information for both the team and the key audiences.  You never know when your home computer will have a meltdown and prevent you from accessing critical online information. 

Implement the five “Crisis Plan Essentials” and you should be well prepared to mobilize in times of crisis.  Remember to focus not just on creating The Plan for specific crises, but to take a more holistic look at how you will respond to the different scenarios that may come your way.  Companies that are prepared to communicate in any situation will fare better in the long run than those that think they have mapped out each and every step they will take when confronted with a limited number of predetermined crisis scenarios. 

David Calusdian, an executive vice president and partner at Sharon Merrill, oversees the implementation of investor relations programs, coaches senior executives in presentation skills and provides strategic counsel to clients on numerous communications issues such as corporate disclosure, proxy proposals, shareholder activism and earnings guidance. David’s clients are focused in the industrial, life sciences and technology sectors. 

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Nothing has more power to change a boardroom’s dynamics than the election of dissident directors – especially when they arrive as a twosome. I had the honor of moderating a panel discussion on shareholder activism at the National Association of Corporate Directors New England Chapter breakfast event earlier this month, where seasoned board members talked about the lessons they’ve learned in battling high-profile proxy contests over the years.

One of the stories, told by a former board chairman, involved the legendary corporate raider Carl Icahn. A manufacturing glitch had resulted in a steep drop in his company’s share price. After repeated attempts, Icahn was finally successful in having two of his nominees elected to the board. This occurred not long after the principal of another activist institution had been elected as a director, and not long before the company received an unsolicited tender offer at a substantial premium to the then-current share price.

The former chairman painstakingly recreated the scenarios that unfolded over the next few months as the board considered the takeover offer. At first, he focused on the gulf in interests and motivations between the newly elected “directors” and long-time members of the board. Unlike the established directors, who had long been personally committed to the company’s vision, mission and business strategy, the dissidents’ only interest was in immediately monetizing the company’s value for shareholders, he said. Predictably, these conflicting goals led to tremendous stress and friction on the board.

This part of the panelist’s story reinforced some of the points I’ve mentioned in my previous blogs about shareholder activism:       

• It’s all about valuation. Unexpected setbacks can hit even the best-managed, fastest-growing companies, causing the stock price to fall. Without warning, they become vulnerable targets for dissident shareholders.
• Activism is a bullet that can’t simply be dodged. Although stonewalling can feel like a practical option at first, the most effective way to respond to activists is to engage with them, openly and honestly.
• Once a company has been targeted by activists, there are no permanent cures. Dissident shareholders don’t just fade into the woodwork; they keep coming back. The best that can be hoped for is a lengthy remission, and even a remission takes extraordinary amounts of hard work and patience to achieve.

The former chairman’s story took an unexpected turn, however, when he talked about the lesson he learned. This lesson brought to mind the often-quoted phrase of 19^th century German philosopher Friedrich Nietzsche, who wrote: “Out of life’s school of war: What does not destroy me makes me stronger.”

Yes, the day-to-day pain of dealing with three dissidents as board members verged on being destructive. But, in retrospect, these individuals brought outside perspectives that were crucial in enabling the board to maximize the value obtained for shareholders as a result of the company’s sale. They were not only able to draw upon personal experience accumulated in years of hands-on M&A experience, but also bring analytical resources to bear that otherwise would not have been available to the board. In addition, their presence during meetings sparked a level of informed debate that may not otherwise have materialized.

Knowing this company’s history I would not have expected it, but the former chairman concluded his remarks by emphasizing that activism has its positive attributes. Paralleling the words of Nietzsche, instead of destroying this particular board of directors, the arrival of dissidents enabled it to bargain more effectively in the best interests of the company’s shareholders.

In an environment of growing shareholder activism – in which, for myriad good reasons, the typical outcome is a proxy contest – this panel discussion provided ample food for thought.       

Maureen Wolff is president and partner at Sharon Merrill.  Maureen leads the implementation of the firm’s strategic vision and provides high-level strategic counsel to clients. She is a past chairman and board member of the National Investor Relations Institute (NIRI) and a current member of NIRI’s Senior IR Roundtable. She also is a past president and honorary director of NIRI’s Boston Chapter.  

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By Dennis Walsh, Senior Consultant & Director of Social Media at Sharon Merrill

In business, people aren’t always completely honest. I know…stop the presses! As investor relations professionals, we are constantly playing a poker game with Wall Street.  So how do you know if someone is not being completely truthful with you? Read their body language.

Nonverbal communication, or body language, often sends a different message from the spoken word. The way a person shakes hands, gestures while talking, or even crosses their legs, sends subtle but clear signals about the real meaning behind the message. Even a simple touch of the nose may indicate that a person is being untruthful.

Many Wall Street firms have hired body language experts to train analysts and portfolio managers to identify the nonverbal cues that executives give. So it’s beneficial for CEOs and CFOs to recognize these signals, to ensure they aren’t unwittingly conveying the wrong message.

NIRI Boston’s November educational session featured Jan Hargrave, an expert and author of several books on nonverbal communication, who provided many useful tips on how to interpret body language in a business setting.   Hargrave has earned a solid reputation working with blue-chip clients, and has even been engaged as a body language expert for several high-profile court cases.  She says that 55% of all communication is nonverbal; 38% is related to voice inflection; and only 7% comes from the spoken word. What’s more, there are 800 body language gestures given off during the span of the average conversation.

Here are 5 useful tips that we learned from Hargrave that you should watch for when analyzing an in-person meeting:

1.       Use of the left hand is a key indicator that a lie is being told. Examples include scratching of the nose or left eye, tugging the left earlobe or covering the mouth.  The use of the left hand is important because it is controlled by the right side of the brain, which is the “creative” side that is often used to create a story, rather than the left side, which is known to be the “logical” side of the brain.

2.       A handshake says a mouthful.  As we have been told many times before, a firm handshake indicates confidence.  But do you know how many pumps are considered to be acceptable? It’s three.  A limp handshake may indicate a lack of self-esteem.  When someone places the free hand on your arm while shaking, they are indicating that they are fully committed to the introduction or conversation…think politician. Ever notice someone’s finger pointing toward you during the shake? They want the last word in the upcoming conversation.

3.       Never cross your arms during a negotiation.  It closes you off to the other individual.  If the person you are negotiating with has their arms crossed, it is not a good sign for you. Offer them something to hold, like a printout or coffee, it opens them up.  If you must, cross your arms with your fingers showing. This is perceived as more of a resting, or coaches, position.

4.       Keep a steady tone to express confidence. Variations in voice inflection may indicate that a person is straying from the truth.  When analyzing witness testimony, Hargrave’s research has shown the pitch in a person’s voice is often higher when telling a lie.

 5.       Body language can be positive as well. Palms facing upward indicate acceptance.  If you use your hands while you speak, make note of the directions your palms are facing.  You want the other person to feel you are welcoming their participation in the conversation. When the hands are in the “steeple” position, a person is indicating that they are positive and confident about what is being said. Careful though, if the steeple position follows several negative cues, the person may be confident in their rejection of your offer.

BONUS TIP: Women really can knock a guy’s socks off.   According to Hargrave, when a man adjusts his socks in front of a woman, he is interested in her.  A useful tip for those single IROs out there, I suppose.

In investor relations, anyone who represents the company should be a seasoned presenter.  But in addition to what you say, it’s also critical to be aware of what your body is saying, too.

Dennis Walsh is Senior Consultant & Director of Social Media at Sharon Merrill.  He counsels clients on a broad array of investor relations and corporate communications issues such as market research, competitive intelligence, earnings announcements, investor targeting, roadshow planning and social media.

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By David Calusdian, Executive Vice President & Partner

Year in and year out, Linus sits in the neighborhood pumpkin patch trying to impress Charlie Brown’s little sister Sally with a personal introduction to The Great Pumpkin.  She forgoes trick or treating to wait for the Great Pumpkin as he “flies through the air and brings toys to all the children of the world.”  But every year, The Great Pumpkin disappoints, and as Linus puts it, there’s “nothing compared to the fury of a woman who has been cheated out of tricks or treats.”  Now there’s a holiday icon in desperate need of reputation management.   Here are three tips to reestablishing a positive personal brand whether you are a fictional cartoon character, disgraced athlete or corporate executive. 

1)      Determine Your Desired Brand Identity

Before you begin the reputation rebuilding process, decide what you want the essence of your new personal brand to be.  Philanthropist?  Industry expert?  Respected business Leader?  After you’ve determined your desired personal brand, develop a strategy to take action and then communicate to your key audiences.  For example, in the years after Jimmy Carter’s failed presidential re-election bid, he re-branded himself as a humanitarian very successfully through his work with Habitat for Humanity.  As for The Great Pumpkin, I’d recommend taking the same approach as Santa Claus and the Easter Bunny and finally make good on his toy delivering promise.

 2)      Take Action

A negative reputation is usually not the result of poor communication, but negative actions.  In The Great Pumpkin’s case, he’s the victim of his own negligence in failing to live up to his toy-delivering reputation.  Santa Claus and the Easter Bunny have earned their acclaim and “own” their respective holidays because of the combination of their actions (delivering toys, candy, etc. around the world in one night) and their stellar communications (TV specials, books).  For others looking to rebuild a reputation, the first step is taking a positive action that is in direct contrast to their past misdeeds. Eagles Quarterback and former dog fighting ringleader Michael Vick’s participation in the Humane Society’s anti-dog fighting campaign is one example of a positive reputation-rebuilding action. 

Additionally, ongoing actions should be based on the brand identity goal.  Want to be seen as a philanthropist?  Start a foundation.  An industry expert?  Write insightful articles or blogs.  Respected business leader?  Build your way back up the corporate ladder. 

3)      Communicate

Implementing a communications plan for The Great Pumpkin is critical because he’s failed to meet the expectations of his most ardent supporters year after year.  The same can be said for a CEO whose performance may have let down customers, investors or employees.  The communication usually needs to begin with an expression of regret.  Jet Blue CEO David Neeleman issued a formal apology after passengers on numerous planes were stranded on New York airport tarmacs for hours.  In his apology, Neeleman wisely included a plan to fix the airline’s problems.  Jet Blue recovered from the incident and is ranked today as a top airline for customer satisfaction.  

After the initial expression of regret, choose the appropriate media to reach your intended audience.  Employ traditional media, social media or paid advertising to get your message across.  For example, Jet Blue communicates aspects of its “Customer Bill of Rights” effectively through various media channels. 

After 45 years of disappointing Linus and Sally, The Great Pumpkin has a tremendous amount of work to do in order to build a positive brand and establish itself as the Halloween icon.  But if the giant gourd follows the three steps to effective reputation building, maybe next year Charlie Brown will receive toys and treats from The Great Pumpkin and won’t end up with a pillow case filled with rocks.

David Calusdian, an executive vice president and partner at Sharon Merrill, oversees the implementation of investor relations programs, coaches senior executives in presentation skills and provides strategic counsel to clients on numerous communications issues such as corporate disclosure, proxy proposals, shareholder activism and earnings guidance. David’s clients are focused in the industrial, life sciences and technology sectors.

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I recently spoke at the NIRI Fundamentals of IR Seminar on “Media and Communications,” and the part of the presentation that generated the most discussion was on how to conduct “media training” for CEOs, CFOs and other corporate spokespeople.  Of course, the most difficult part of media training can sometimes be convincing the executive that they need help.  But once you clear that high hurdle, there are three basic steps to help prepare senior management for a successful interview.

1)      Establish key messages.  Without significant interview experience or preparation, your CEO is likely to a) offer rambling responses to questions, b) divulge too much information, and/or c) miss an opportunity to convey the messages you want to get across to customers, investors, employees or other important stakeholder audiences.  Prior to the interview, create three to five key messages and supporting proof points that you want to make sure appear in the story.  When you are developing key messages, think about the audience for the particular interview and the points that you want to convey to that specific stakeholder group.  Look at it this way:  if you were writing the article for the reporter, what messages would you include?  Those are the messages that management should use in the answers to the reporter’s questions whenever possible. Politicians often do this very well.  For example, earlier this year British Labour leader Ed Miliband famously repeated his position on strikes taking place in the UK in several successive questions during a BBC interview.  

2)      Prepare anticipated questions.  Before the interview, write out a list of all the questions the reporter might ask.  Start by focusing on the questions you absolutely do not want posed.  Don’t put your head in the sand and hope that the question never gets asked… because it most likely will.  Work on developing straightforward, credible answers to each question. In developing the answers, don’t worry about drafting long answers word-for-word. Instead, focus on the key messages you developed and how you can work them into the answers.  Using bullet points usually works well for easy memory recall. And while it is critical to think through the answers to the hard questions, don’t forget to have responses prepared for the softballs too.  Nothing can derail an interview like a bad answer to an easy question.  Staying with the political examples, one classic is Ted Kennedy’s rambling response to Roger Mudd’s “Why do you want to be president?” question during his presidential campaign. 

3)      Play to the medium. There is a tremendous difference between a live broadcast, whether for TV, radio or webcast, and an interview for print, where you can afford to take a long pause to collect your thoughts without the audience’s knowledge.   Even the difference between a video interview, whether for TV or webcast, and an audio webcast or radio interview has significant ramifications on how you should prepare your spokespeople.  For example, capturing the right tone of voice in answering difficult questions during a radio interview is no easy task.  And being aware of the messages that your body language is sending during a TV interview can be equally as important as the words you are saying.  In another classic political example, the Kennedy/Nixon debates clearly demonstrated the immense difference between audio and video presentations to the detriment of the Nixon campaign. 
 

In any profession, whether politics, sports, or business, preparation for interviews is critical. As basketball hall of famer and frequent foot-in-mouth interviewee Charles Barkley said, “I don’t think of myself as giving interviews.  I just have conversations.  That gets me in trouble.”  The best interviews are those that are so well prepared, that they sound like conversations.  Follow the three steps to effective media training and your spokespeople will be on their way to a successful interview.

David Calusdian, an executive vice president and partner at Sharon Merrill, oversees the implementation of investor relations programs, coaches senior executives in presentation skills and provides strategic counsel to clients on numerous communications issues such as corporate disclosure, proxy proposals, shareholder activism and earnings guidance. David’s clients are focused in the industrial, life sciences and technology sectors.

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The firing of Red Sox manager Terry Francona offers a few valuable lessons in crisis communications, especially those relating to the unexpected departure of an executive.  For those of you outside of Red Sox Nation, let me offer a little background: the only living manager of Boston’s professional baseball team to win a world series (twice!) is now unemployed after missing the playoffs following a disastrous September collapse.  To be technical, Francona wasn’t fired; the team declined to pick up the option on his 2012 contract.  While the debate over letting Francona go is an ideal subject for a sports-focused blog, the way the decision was communicated offers two valuable lessons to anyone in crisis communications. 

1)      Take a Deep Breath:  When a decision is made suddenly to release a senior executive, care should be taken to think through the communications timeline.  The Red Sox put Francona in front of the microphones the day after the final game of the season for no reason other than to discuss the final calamitous loss.  If ownership had even an inkling that the team would be sending Francona on his way, why put him in front of reporters to awkwardly answer questions about his future?  To make matters worse, the very next day Francona held a press conference to announce his departure, which was then followed by another media gathering by the Sox brass to discuss the action.  Why two additional separate press conferences?  The Sox would have been better served to have one well rehearsed press conference (including Francona and the Sox higher-ups) to address the disastrous end of the season and announce that the time was right for a managerial change.  In any crisis situation, take a deep breath, think a few steps ahead and plan all messaging and timing of external communications accordingly.

2)      Be Credible:  I am obviously not privy to the private discussions between Francona and his former bosses, nor am I in his head.  However, the party line at Fenway Park that Francona made the decision to leave, and that ownership tried to entice him to take the weekend to think about the decision is laughable.  Even before the late-season collapse when the Red Sox were playing the best baseball in the league, the team had failed to pick up the 2012 club option on the most successful manager in the franchise’s history.   So to say that it was Francona’s (and not – at best—a mutual) decision, is just not credible.  In sports, as in business, it is better to provide the whole truth or say very little and let the audience come to the right conclusion on their own.  In business situations, saying that an executive has “left to pursue other interests” is a typical euphemism for “fired” but allows both sides to save face and maintain credibility.  In the end, the organization needs to communicate in its own self interest beyond the needs of the departing executive, but in doing so, also needs to maintain its credibility. 

Whether communicating the departure of an executive or in any other crisis, management needs to think through how their messages will be received by their audiences. The content and the sequencing of the communications are critical to how the messages will be accepted.  Based on the firestorm that continues to erupt in Red Sox Nation, the franchise did not do an adequate job on either.  Corporate communicators should take heed of the Sox’ mistakes and remember to take a deep breath and communicate credibly during their next crisis.

David Calusdian, an executive vice president and partner at Sharon Merrill, oversees the implementation of investor relations programs, coaches senior executives in presentation skills and provides strategic counsel to clients on numerous communications issues such as corporate disclosure, proxy proposals, shareholder activism and earnings guidance. David’s clients are focused in the industrial, life sciences and technology sectors.

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It’s that time of the year again.  Four times a year, institutional investors that hold more than $100 million in assets under management are required to file a Form 13F with the SEC that lists the securities held in their portfolio and the number of shares owned…45 days prior.  Every quarter when I’m going through these filings for my clients, I have a similar reaction as Adam Sandler in “The Wedding Singer”:

The 13F filings provide a snapshot into the makeup of a company’s shareholder base at the end of each quarter.  While they offer some insight into how a company’s ownership has been trending, they fail to provide who the shareholders are in real time.  It is extremely frustrating when the markets are under pressure and volatility is high – as it has been in recent weeks – to not know who owns your company’s stock.    During the recent rollercoaster swings in the market at the beginning of August, the publicly available shareholder data was current only as of March 31 (ownership data as of June 30 wasn’t due to the SEC until August 15)!  With all the buying and selling that has taken place, a company’s shareholder base could potentially be wildly different since the end of the previous quarter.

Understandably, institutional investors don’t want to provide a deeper level of detail into their day-to-day investment strategy, but why should the issuers be at such a disadvantage?   

Earlier this summer, NIRI stood up for public companies and submitted a letter to the SEC requesting more frequent reporting of shareholder data from institutions.  In the letter, NIRI Chairman Jeff Morgan calls for, amongst other things, shareholder data to be made available on monthly basis, within ten days of the end of each month.  He argues that with today’s technology, this should be a simple request. 

Sure, Mr. Morgan’s solution still won’t result in real-time access to shareholder data, but it would offer more frequent reporting than what is required today. 

Until a change comes to pass, make use of the data available to you today.  It can be very resourceful for your investor relations program: 

• Are there new shareholders in your stock that you have yet to meet with?  Arrange an introductory call with management.
  
• Are you seeing a shift in the investing styles of your shareholder base, i.e. more growth or value investors?  Use this information to fine-tune your messaging strategy. 
• See that a major shareholder has significantly reduced their position since the previous quarter?  It’s time to get back in touch and reiterate your company’s value proposition. 
• Are your shareholders concentrated in one region?  Plan your upcoming roadshows in cities that you have yet to visit.

There is an article in NIRI’s August 2011 IR Update (PDF; requires membership) titled, “Institutional Ownership, No More Secrets” that provides more detail on Mr. Morgan’s letter to the SEC. 

Dennis Walsh is Senior Consultant & Director of Social Media at Sharon Merrill.  He counsels clients on a broad array of investor relations and corporate communications issues such as market research, competitive intelligence, earnings announcements, investor targeting, road show planning and social media.