Thumbs Down

27 July 2007

This week I was directed toward two companies that have some basic investor relations issues.Thumbs_down

One was a company that posted analyst reports on its website, a well known “no-no” in IR land. When you post analyst reports you are endorsing what is said in those analyst reports and that can get you into legal trouble down the road. The other was a company that had not bothered to post 5 out of its last 6 press releases on the company’s website. This goes against fair and timely disclosure best practices.

Think of a potential institutional investor who sees this and what questions may come into their mind:

• Is this company serious about following the rules and best practices that most other public companies follow?

• Is this company serious about being a publicly owned company?

• Is management of this company competent?

• Do I really want to invest millions of dollars into this company?

• Does this company even know that they are making mistakes?

Investors and analysts tend to dissect any and every aspect of your business as a means for evaluating competence and ability to succeed. They expect you to “sweat the small stuff”.  When blatant errors like this are made important investors will look elsewhere.

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