Every Breath You Take

10 February 2009

The financial community is fickle.Investigate Institutional investors and analysts who love you today can, and often will, leave you tomorrow if you give them a reason to.  Investors and analysts, rightly or wrongly, watch every move you and your company make.

Here are just a few attributes that the financial community examines when looking at your company:

  • Management’s body language during a one-on-one meeting – if you fidget while answering a tough question then something is wrong.
  • Management’s tone on a conference call – if you are agitated by a particular question then a vulnerable area of the business has been exposed.
  • Attendance (or lack of attendance) at an investor conference – you didn’t show up, so obviously you don’t want to face the investment community. Business must be bad.
  • Responsiveness to information requests – you haven’t responded to a voice mail and email from 3 hours ago.  Clearly you are avoiding investors.
  • Updates to forward looking statement disclaimers – there is something new in this quarter’s disclaimer, therefore the lawyers are sensitive to something new.
  • Traffic (or lack of traffic) at your tradeshow booth – there’s only a few people at your booth.  Your product is obviously inferior.

Top notch investor relations departments attend to every detail.  They account for all of the above attributes and dozens more.  They are prepared.  They rarely give the most skeptical of investors and analysts a reason to be skeptical.

2 Responses to “Every Breath You Take”

  1. Boyd Neil

    I would be interested in your point of view on whether updates to IR websites (or not) also constitute a signal of something.

  2. Anil Dilawri

    Thanks for the question, Boyd.

    Yes – IR websites are commonly monitored by the Street. Occasionally, some website updates can be cause for skepticism. For instance, if the Sr. VP of Worldwide Sales has suddenly had his bio pulled from the management bio page then there may be cause for concern. Or, if an investor conference that was once on the company’s “calendar of events” has suddenly been removed then questions may arise.

    The remedy is NOT to keep information off the IR website. The remedy is to be prepared to respond to investors or analysts who have questions about updates to the IR website.

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