Girl Power

Sequoia Capital made news this week when they hired the firm’s first female investment partner in the United States.  This appears to be a 360 degree turn from last year, when, according to The New York Times, Sequoia’s Chairman said the firm did not have female investors in the United States because it did not want to lower its standards.

Women are rare in the highly competitive and cutthroat field of venture capital. According to The Times, research from Babson College showed the percentage of female venture capitalists at 6 percent, down four percentage points from 1999, at the height of the dot-com craze.  The CrunchBase Women in Venture report found that of 100 venture firms studied, 7 percent of the partners at those firms were women, and that 38 percent of the top 100 firms have at least one female partner.  In February, Bloomberg columnist Barry Ritholtz sought to answer the question: Why aren’t there more women in finance?  A possible answer is that “it may be a legacy of what has not only been a male dominated society, but it probably also reflects an industry that is particularly resistant to change,” or that “there are simply not a lot of women in senior positions in all of business, and finance to a great extent mirrors that reality.”

One would think then that there is a perception that women are not as accomplished as men. According to Ritholtz, several studies (Fordham University and the CFA Institute) have found that women in the actively-managed fund industry tend to outperform their male peers.  If true, why are the numbers still so lopsided?

Perhaps the tide is turning for women in business, however. The Los Angeles Times noted that among the largest U.S. companies, women now fill 20 percent of board seats, up from 15 percent in 2005.  In fact, women have made strides recently in other male-dominated professions.  There are now female referees and coaches in the NFL, female play-by-play announcers for major league baseball and female heads of state.  Great news, for sure, but how is that playing out in corporate America?

A 2012 case against Kleiner Perkins Caufield & Byers showed that women and men don’t always play nicely in the sandbox. That case saw a female partner, Ellen Pao, sue the firm for gender discrimination.  She lost the suit in 2015, but during a press conference Pao was quoted as saying, “If I’ve helped to level the playing field for women and minorities in venture capital, then the battle was worth it.”  Pao recently launched Project Include to assist startups and HR departments with recruiting, hiring and retaining a diverse workforce according to Wired.  Project Include also works with venture capital firms whose business is to help startups develop.

There is a lot of work to be done, but it’s my opinion that embracing diversity in the boardroom, on Wall Street and in business can only help improve the variety of opinions, talents and expertise necessary for us to thrive.

– Laurie Berman,

On the IR Front…What’s a Penny Here and There, Anyway?

While a penny can be a pretty big deal as far as earnings per share performance goes, when it comes to trading stocks, the National Market System (NMS) thinks and hopes the lowly cent, actually five cents, can potentially make a really big difference when trading stocks.

Starting by the end of this month, as a way to increase the attractiveness of trading and research in smaller cap stocks and to make going public more attractive, the NMS will implement its “Tick Size Pilot Program,” effectively widening the minimum quoting and trading increment by raising the tick size to a nickel from a penny.

By definition, a “tick” is a measure of the minimum upward or downward movement in the price of a security. If a stock has a tick value of one cent, each tick, or price movement is in one-cent increments per trade. As part of the test, each tick will be equal to five cents per trade.

As a by-product of the 2012 Jobs Act, the program is set to last for two years, following which a determination will be made if increasing the tick size increment will improve the liquidity, trading and market quality of stocks with market capitalizations of $3 billion or less; average daily trading volume of one million shares or less; and volume-weighted average price of at least $2.00 for each trading day. The test will be implemented on 1,200 stocks.

The NMS is the national system for trading equities in the United States, and includes all the facilities and entities which are used by broker-dealers to fulfill trade orders for securities, principally including the New York Stock exchange and Nasdaq.

While it is difficult to foresee what the impact of the test will be, the hope is that will allow for a bigger list of stocks that are accessible to quality institutional investors.

Roger Pondel,

Let Your Voice Be Heard

With little fanfare or media coverage, the U.S. Securities and Exchange Commission last week said that for the next 60 days it is seeking public comment on disclosure requirements relating to a host of management, security holders and corporate governance matters.

SEC Chair Mary Jo White is leading a charge to address outdated and redundant disclosure requirements for the benefit of the nearly half of all Americans, who in some form, own stock in publicly traded companies—from direct ownership of individual securities, to ownership through 401-K and pension plans, IRAs, mutual funds and ETFs.

As part of the SEC’s “Disclosure Effectiveness Initiative”, the Commission wants to be certain that information disclosed by public companies and relied upon by investors to buy, sell, or hold, is as clear, accurate and comprehensible as possible, conveyed in a manner that is timely, and delivered making best use of today’s technology.

Amendments being considered address outdated and redundant disclosure requirements, and providing investors with what they need to make informed decisions.

Granted, for most Americans, revamping public company disclosure practices may not be one of the most important issues facing the world today. But if you are reading this blogpost, you likely are reasonably close to the heart of this matter, so let your voice be heard. You have until the end of October to do so.

Roger Pondel,

Read This Before Posting

I was listening to Marc Maron’s WTF podcast the other day when he equated the word “content” to corporate detritus that clogs up the Internet and bombards people with useless information. I don’t think you can make a blanket statement and say that anything deemed “content” is rubbish, but I do agree that there is a glut of content on the Internet that lacks substance.  It is also becoming increasingly difficult to distinguish “sponsored content” from content that is published without strings attached.

For example, a story that runs on about the virtues of an organic diet could be defined as content, although a journalist most likely synthesized the information to present an objective sequence of thoughts about this particular subject. Juxtapose a story with a sponsored blog post on the Huffington Post about the merits of an organic diet, and the word “content” takes on new meaning.

But is there truly a difference between paid content and content that isn’t sponsored?

The unsponsored content found in mainstream media and trade publications has often been influenced by the very advertisers (or sponsors) and subscribers that pay for the content to be produced in the first place.  And yet, I have to agree with Maron that the word “content” is beginning to smack of something manufactured, manipulated, and ultimately, unworthy of a read.

At PondelWilkinson, we are often in a position to create content, whether it is writing a press release, posting an image on a blog, or publishing a tweet. We strive to ensure that the content we create is substantive; to do that, we think obsessively about every single detail, including word choice, the audience, and the best way to deliver the content.

To help encourage the publishing of quality content, following is a list of items to consider before hitting “post.”

  • Know your audience. The best way to ensure your content is connecting with its intended audience is to know who you are targeting.
  • Write with intention. Writing a blog post with a goal in mind, a thesis to prove, a point of view to express will help ensure the content resonates with readers.
  • Pay attention to detail. Word choice, grammar and focus matter when asking someone to read something, even if it is 140 characters or less.
  • Provoke interest. Let’s face it, anyone can write or publish something on the web. Ask yourself if what you are writing is provocative or original.
  • Review analytics. Almost anything published online leaves a footprint. Understanding what analytics matter and whether you are hitting the right target audience will help you know if your content is worthwhile.

– Evan Pondel,

Nudge, Nudge…Wink, Wink

Once upon a time I was an idealistic investor relations professional who assumed that when Reg FD (Regulation Fair Disclosure) was enacted in 2000, all public companies would follow the SEC’s initiative to the letter of the law.  No speaking to one before speaking to all, at least where material, previously undisclosed information was involved.

Did Reg FD have the impact the SEC was hoping for – a more level playing field? In 2001, CFO magazine quoted Boris Feldman, a securities attorney at Wilson Sonsini Goodrich & Rosati as saying, “Is the market better informed?  Of course not.  There’s more transparency, but less meaningful information.”  The article went on to say that in that year’s fourth quarter there were nearly 800 pre-announcements because “analysts are less likely to be told on the QT to shade their estimates.”  The Pepperdine Law Review in 2002 surmised that “the only thing that has changed is the amount of securities regulation operating on American markets.  The investors are no better off; the analysts are no worse off; the lawyers are the only ones who may have benefited.”

Although I could not find many examples of how Reg FD has benefited corporate disclosure or the investment community at large, there are many examples of the SEC’s enforcement of the rule. To name a few, in 2007 the SEC contended that Office Depot’s then CEO and CFO selectively disclosed to analysts and investors that the company would not meet analysts’ earnings estimates.  Office Depot paid a $1 million fine to settle the allegations.  In 2013, the SEC charged the former head of investor relations for an Arizona-based company for giving certain analysts and investors a heads up about an upcoming major development.  He paid a $50,000 fine.  Last year Bloomberg reported that since Reg FD’s beginnings, the SEC has brought 14 enforcement actions.

Today, the practice of meeting one-on-one with investors appears as robust as ever. In addition to non-deal roadshows, companies routinely present at broker-sponsored conferences with individual meetings sprinkled throughout the day, while one-on-one phone conversations between companies and their investors happen multiple times a day, every day.  What’s being said during these conversations?  According to a new article in the Wall Street Journal, Barry Diller, chairman of Expedia and IAC/InterActiveCorp, “analysts and investor-relations executives work together to keep estimates low.  ‘It is a rigged race,’ he says.”  The supposition is that companies send signals to analysts to ensure the companies meet or beat quarterly Wall Street expectations.  An analysis by the paper found that after the end of a quarter, earnings estimates often decline steadily.  The Journal looked at daily changes in analysts’ estimates at S&P 500 companies since the start of 2013 and compared them with what the companies actually reported for each period.  In nearly 2,000 instances, companies “would have missed the average earnings estimate if analysts hadn’t changed their numbers in the 40 trading days before the company’s quarterly earnings report.”

To avoid the potential of selectively disclosing material information, in this case where revenues and EPS will land in any given quarter, many companies have adopted stricter quiet periods and formalized processes related to analyst and investor communication. The idealist in me wants to believe that more companies than not adhere to the rules and don’t give some an unfair advantage over others.  However, while I in no way condone running afoul of securities law, the hardened realist in me thinks there will always likely be some nudge, nudge…wink, wink.

– Laurie Berman,

Turning the Tables: An Intern’s Perspective

PondelWilkinson is very lucky to have a fantastic intern on staff. Her name is Yukari, and she recently earned a master’s degree in strategic public relations from USC. Among many other duties, Yukari has been helping enhance PW’s social media presence, and as a result, our Facebook and Twitter pages are now chock full of great content. Since Yukari frequently asks the members of our staff questions to help drive our social media content, I thought I’d turn the tables on her to find out how she feels about working in the real world of strategic communications after finishing her schooling. Below is our interview.

Q: Why did you decide to study communications?

Yukari Nishi during  Career Day at the University of Southern California.

Yukari Nishi during Career Day at the University of Southern California.

A: I started my undergraduate career as a vocal performance major at Berklee College of Music. Then I had the opportunity to study in Tokyo, and that’s where I decided to transfer my major to communications. I’ve always wanted to do something creative, and after I took a PR class, I realized that it would be a good career to pursue. After I completed my studies in Tokyo, I transferred to Rutgers University and got my communications degree. This past May, I got my master’s in strategic public relations from USC.

Q: Do you think your education prepared you for the real world?

A: I definitely think that the program at USC prepared me for the real world. The professors that I learned from have both in-house and agency backgrounds, and the experiences they shared were really interesting and helpful. I wish I’d found PR earlier in my undergraduate career, but I probably wouldn’t be here today if I didn’t take the time to figure out what I really wanted to do.

Q: What qualities do you think are important to succeed in this field?

A: Networking skills are a must in this field. I also think the ability to adapt is really important. Especially at an agency, you have the opportunity to work with all types of professionals in many different fields, and it’s important to know how to deal with, understand and embrace those differences.

Q: Has anything surprised you about the field since you started working here?

A: Not necessarily a surprise, but more of a confirmation. I’ve heard from many professionals and professors that in an agency, no two days are the same.  Working at PondelWilkinson definitely confirmed that, and I’ve enjoyed learning different things every day. I come to the office wondering what type of projects I’ll get to work on that day.

Q: What are some of the more interesting things you’ve worked on since joining us?

A: I really enjoy creating graphics for different events, survey results and giveaways because it allows me to bring out my creative side. It’s important to be able to tell a story using graphics. I also like drafting news releases because during the process I get to learn more about the client and the client’s impact on its industry.

Q: What has been the hardest adjustment?

A: Pitching reporters is not easy. Speaking with journalists was pretty challenging at first, but now I’m getting a feel for how to approach them and better understand what kinds of things they need from me to make a decision on whether to cover our clients. Their time is valuable and you need to get their attention in a very short time frame.

Q: What advice would you give someone wanting to get into the communications field?

A: I would say that working on your writing skills is really important. A lot of writing comes with the job, and you can never get enough practice.  I also think it’s important to keep in touch with the connections you make, because it’s a small world and you never know how those connections might help you in the future.

We’d love to hear from you in the comments below if you have any other great tips to share for those just starting out.

– Laurie Berman,

Saturday Mornings, a Frothy Latte and The Wall Street Journal

Ever since The Wall Street Journal started publishing on Saturdays, I have more-than-ever appreciated the print edition, relaxing unrushed with a latte to read just about every story.

"The Cure for Decision Fatigue,” a Saturday Essay in the WSJ.“

“The Cure for Decision Fatigue,” a Saturday Essay in the WSJ.

Aside from major news, which all of us see from many media, it seems like on Saturdays, the Journal always publishes some interesting pieces that go largely unnoticed by other publications. This past weekend was no exception.

There was a near full-page feature about where to go for the best ice cream sundae in New York City (the Brooklyn Farmacy & Soda Fountain); a story about walking in Los Angeles’ new downtown Arts District; a column about the rise of the “polypill,” an all-in-one capsule that will lower your cholesterol, take down your blood pressure and reduce your blood sugar at the same time; and a practical treatise touting the benefits of wearing seersucker swimming shorts.

With my business hat on, however, the one that caught my eye was the “Intelligent Investor” column by Jason Zweig. I had spoken with Jason during the week as he was researching his column, which focused on how, over the recent years, America’s individual shareholders have essentially disappeared from view.

Jason pointed to an antiquated SEC rule, dating back to 1934, stating that if a company has fewer than 300 shareholders, it can deregister and “go dark,” saving the company certain costs and also eliminating the communications transparency that shareholders, and I and my colleagues as professional corporate communicators, all hold near and dear.

In part because of technology, most investors for many years have been buying shares in electronic form. They hold those shares in brokerage accounts, rather than seeking share certificates from the issuers. The actual record holders in essence have become the brokerages. One record holder possibly could represent thousands of individual investors.

The practicality of the brokerages forwarding to their customers all the news that an issuer distributes is just about nil. Moreover, if a company goes dark, requirements for widely issuing any news is significantly reduced. As is the point of Jason’s column, if an issuer wants to tune out almost completely and deregister, it would be pretty easy. That’s a frightening thought that over time could significantly diminish valuation for all holders.

Fortunately, most of the companies going dark are not main stream, and in our observation, are typically quite small and usually not of the highest investment grade. Perhaps, however, it is time for the SEC to look at this rule and increase that 300 minimum number for the benefit of all shareholders.

Nice piece, Jason. Hopefully you haven’t given any ideas to too many issuers! As to other stories in Saturday’s edition, there also was an interesting one headlined, “The Cure for Decision Fatigue.” Perhaps I should have had a cappuccino instead of a latte?

—Roger Pondel,

Gearing Up for the IR Community’s Largest Gathering

On Sunday, I’ll be heading to the 2016 NIRI annual conference in San Diego to learn about the latest developments in our industry, hear informative (and I hope entertaining) speakers and meet like-minded people to gather intelligence about what makes a successful IR program.

The sessions I’m most interested in follow:

  • Overview of Key Corporate Governance and Regulatory Issues – And What You Need to Know to Keep Activism at Bay. Those who follow this blog know that we’ve written about activism in the past, including this post about the rising tide of activism. Although it was written nearly eight months ago, the message is still relevant today. A recent Wall Street Journal article reported on the creation of the Council for Investor Rights and Corporate Accountability, or Circa, which is the “first coordinated effort by activists to make their case to lawmakers and the American public that their investment strategy helps, rather than harms, companies and the U.S. economy.” There are some major heavyweights on the Council, including Carl Icahn and Bill Ackman.
  • Breaking through the Noise: Latest Trends in Quarterly Reporting. Without trying to give away my age, I have now been involved in nearly 90 quarterly reporting cycles. If I add the fact that for the majority of that time I’ve been at an agency serving a multitude of clients, I bet I’ve written more than 500 earnings releases and conference call scripts (kind of crazy seeing that in black and white). Oftentimes, it’s hard to get excited about a process that generally lacks creativity in how the news is delivered. Recently, however, we’ve seen video earnings calls from Restoration Hardware, use of social media as a primary disclosure outlet from Netflix and formal remarks being posted on IR websites to allow for Q&A-only calls.
  • Short Attacks: The New ‘Wolf Pack’: Best Practices for Preparing and Defending Against a Short Attack. I’ve been intimately involved in an organized short attack this year, and it’s anything but fun. A recent Supreme Court Ruling, as reported by Bloomberg, could make naked short selling much more difficult for those trying to manipulate the stock market, while Carson Block, an activist short seller, told Business Insider, “I think we’re helping people.”

There will be lots more to see, hear and explore. If you’ll be in San Diego next week, look for me so we can exchange war stories.

– Laurie Berman,


IR 101 for Private Markets

CrowdWith the first quarter of 2016 the slowest period for initial public offerings since 2009, market watchers are wondering if the trend will continue in the year ahead. So, where might investors look for new opportunities? Try private markets, or specifically, companies utilizing crowdfunding as a financing method.

Starting May 16, the general public will have the opportunity to participate in the early capital raising activities of start-up and development-stage companies through crowdfunding. You can read all about it on the Securities and Exchange Commission’s website.

What isn’t discussed on the SEC’s site is how these companies will communicate effectively with their investors. Many of these companies are likely on tight operating budgets, and the idea of allocating funds toward investor relations is not exactly a priority.

However, now that the general public has the ability to participate in a stage of investing usually reserved for institutions, management teams need to ensure these new investors are communicated with regularly, as well as treated with the same dignity and respect as a Fortune 500 investor.

Following is a top-10 list of IR advice for companies going the crowdfunding route:

  1. Initiate some form of periodic communication with your investors, perhaps in the form of a quarterly update letter, podcast or even blog post.
  2. Select a representative from the company or an outside consultant to handle incoming inquiries from investors.
  3. Utilize presentations, fact sheets, video and social media to help investors understand the company.
  4. Consider hosting an investor call on a periodic basis to foster transparency and an open line of communication.
  5. Develop an investor relations page on your website to keep investors posted on recent news and the company’s progress.
  6. Consider hosting an annual meeting that investors will actually attend. The event could generate more support, as well as more funding for your company.
  7. Keep investors in the know about relevant industry news, so they, too, can become experts.
  8. Under promise and over deliver. Managing investors’ expectations is key, especially for early stage companies.
  9. Stay away from divulging too much information about your company’s future financial performance. Again, this harkens back to under promise over deliver.
  10. Treat investors as owners not strangers.

Bottom line: Professionally crafted communications form a foundation to attract and retain investors, regardless of an issuer’s size, but even more so for early stage companies, as they go to market for the first time and build their organizations.

– Evan Pondel,