Under a Microscope

27 November 2009

There’s a lot at stake when your company communicates with the investment community. It’s more than just your company’s valuation at stake, it’s your company’s reputation.

I recently came across an example of a company that decided to hold a closed conference call with sell-side analysts about future financial guidance. This wasn’t a microcap company that nobody has heard of before. This was a multi-billion dollar market cap company that should have known better.

This was quite obviously an error in judgment and a fairly clear case of selective disclosure.

Think of what a mistake like this does to a company’s reputation. Think of the buy-side institutional shareholder or the retail shareholder who was excluded from the conference call. Mistakes like this are costly.

Even the small details matter. Think about what the cost is to your company’s reputation when you don’t call an investor back after they have left you a message. What’s the reputational cost of having a spelling mistake in your investor presentation or on your IR website?

Everything you do as an IR professional and as a company is looked at under a microscope by the Street. You are always being evaluated, scrutinized, and judged.

The investor communication stakes are high when your shareholders are just seconds away from dumping your stock.

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