Not Your Average Covfefe

Whether investor relations or strategic public relations, or even in politics, we all know that words matter.

Every once in a while, I get stumped, sometimes amused, by simple-sounding, strange words that I have never seen before. Some only have four letters. I jotted down ten real words I read over the past couple of months that I am happy to share with PW Insight readers.

Test yourself and see how many you know. And please send me a quick email if you get even half of them right. Call me immediately if you know them all.

  1. flense
  2. tankles
  3. nish
  4. fob
  5. wheedle
  6. lanx
  7. puce
  8. yeta
  9. peen
  10. pelf

The answers:

  1. to strip blubber or skin from a whale or a fish
  2. a sound louder than a tinkle
  3. nothing
  4. chain attached to a watch
  5. to coax by flattery
  6. a platter for serving meat
  7. a dark red or purple/brown color
  8. awesome
  9. end of a hammer head opposite the face
  10. money gained in a dishonorable way

Roger Pondel, rpondel@pondel.com

Pretzels as a Barometer of Being Busy

Every office has its busy times, be they monthly, quarterly or annually.Pretzek

For investor relations and public relations firms, such periods vary from quarterly financial reporting, to client crises, and unexpected projects. In our office, a look at our “pretzel barrel” and how fast it is depleted is a great gauge of how busy we are.

It is filled every Monday, and by most normal Fridays, it is half full. Other Fridays, about a quarter full…which signifies a busy week; and during earnings season, I’m surprised there’s a pretzel left.

I’m not sure how or why the pretzel barrel got started in our office, but the origin of pretzels is intriguing. As the story goes, pretzels were created by an Italian monk more than 2000 years ago, who baked strips of dough and folded them into a shape resembling a child crossing his arms in prayer. The pretzel history books say nothing about the added salt.

When eating pretzels in 2017, perhaps we are subconsciously praying for help; or, as today’s health-oriented psychologists may say…we may be stress eating.

Regardless of the reason we eat pretzels—some of us do so simply because we like them—keeping one’s composure during busy times is key. I must admit that our staff is pretty good about maintaining the calm. Most days, it sure feels like we are busy. But heck, it’s Friday, and this week our barrel is still three-quarters full.

–Janet Simmons, jsimmons@pondel.com

Memorial Day Marketing

While Memorial Day is sort of the unofficial start of summer, the holiday is a solemn one, established to honor fallen servicemen and women of the U.S. military.

It’s also a time for big summer sales … and everyone from car brands to home improvement centers are getting in on the action.09977D90-C0C4-FB0A-F09894BE0965A93A

Too many times, however, brands take exception to the true meaning of Memorial Day, putting them in the proverbial hot seat. One beer company actually tweeted: “Something to remember on #MemorialDay. It’s a LOT better and a LOT more memorable with #craftbeer!”

Scores of companies continue to miss the Memorial Day mark, with some even issuing apologies responding to their own self-induced holiday crises. Much of the trouble occurs when brands try to mix “summer fun” and Memorial Day.

Marketers need to be aware of the potential backlash of being perceived as insensitive to veterans and their families. While tagging #MemorialDay may increase engagement, it may get the kind of attention marketers don’t want, so consider these three simple tips:

  • Don’t do it. When posting about honoring military men and women, do not segue to any hint of shopping, sales, BBQs, or anything of the like.
  • Enjoy summer. It’s OK to post products or services that showcase summer fun, whether it’s a beer at a picnic, or bathing suit at the beach. Be careful, though, when it comes to hashtags: #MemorialDayWeekend vs. #MemorialDay.
  • Traffic talk. Millions of folks will be hitting the road this weekend and that can only mean one thing: traffic! Find unique, interesting and brand appropriate ways to tie into the travel aspect of the long weekend.

There’s a certain finesse when it comes to marketing Memorial Day. Good judgment and not mixing service with sale will make for holiday-appropriate content.

– George Medici, gmedici@pondel.com

The Protocols of Selling a Story

Everyone is selling something.  It doesn’t matter if you’re in business, education, or politics, we’re all trying to sell a widget, a way of thinking, a party affiliation.  The difference is the method in which something is sold.

For example, are solid facts used to back up a thesis about why a consumer should buy something?  Does an educator emote and use theatrics to explain a concept to students?  How authentic is a politician when she or he attempts to relate to the needs and wants of constituents?

The IR world is no different in that most public companies are creating investor theses to sell a company’s story.  There are a lot of variables that influence the efficacy of a pitch to investors.  But in the spirit of writing a pithy blog post in 500 words or less, following is an abridged guide to what’s hot and what’s not when selling a company’s story in today’s market:

What’s Hot

  • Financial Performance – Nothing beats a solid track record of financial performance when trying to attract investors
  • Transparency – The easier it is for investors to understand a company’s model, P&L, and balance sheet, the more likely an investor will be inclined to take a calculated risk and invest
  • Management Relevance – There is a distinction between relevance and years of experience. Relevance is demonstrating why an executive is the best person for the job today, not a decade ago
  • Long-Term Competitive Advantage – The company must present a compelling thesis in terms of why it has built one of the greatest mouse traps that goes the distance when up against competitors
  • Consistent Communication – Somewhat self-serving here, but if all of the aforementioned items are firing on all cylinders and there is no communication … <insert that sucking sound>

What’s Not

  • Hyperbole – Adjectives such as “leading,” “best,” “greatest,” often instill more skepticism than confidence
  • Homogenous Board – In the age of activism, boards of directors are easy targets, especially if they lack independence and diversity
  • Compensation that Isn’t Tied to Performance – Speaks for itself
  • Press Release Overload – Some companies are prolific and have an endless stream of news to relay to investors, although it becomes rather obvious when companies are simply issuing press releases for the sake of “looking” productive
  • Revolving Door in C-Suite – Too much turnover at the top doesn’t curry favor with most investors

– Evan Pondel, epondel@pondel.com

The 10 Plagues of Investor Relations

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You may be asking yourself, what does Passover have to do with investor relations and strategic public relations?  Not much, actually, but in honor of the holiday I thought it might be interesting to name ten things plaguing our industry.  Not so different, I guess, from naming the ten plagues that have become part of the Seder (a feast that marks the beginning of Passover).  But don’t worry my fellow practitioners, while some of things we have to deal with can be pretty disturbing, we generally won’t come in contact with boils, locusts or diseased fowl in our professional lives.

The 10 Investor Relations Plagues

  1. Short selling
  2. Activists/proxy fight
  3. Scheduling
  4. Fake news/bad news
  5. Value gaps
  6. Crises
  7. Market volatility
  8. Short-term mentalities
  9. Guidance
  10. Shareholder litigation

I’m sure there are others we’ve omitted, so drop us a note and let us know what sort of plagues you’ve had to deal with in the IR world.

Laurie Berman, lberman@pondel.com

Beware of Lurking Wolves

Sometimes, I pick up my own phone at the office. Last week, a friendly caller caught me off guard. The conversation went something like this:

Caller: Hello, Roger, how are you?

Roger: Fine, thanks, how ‘bout yourself?

Caller: I am also fine, thank you for asking. I am calling to let you know that our analysts have started recommending the stocks of several conservative, dividend-paying, major oil companies They are very safe investments, and I would like to start a relationship with you.

Roger: Pardon me?

Caller:  I also want you to know that from time to time we come across the stocks of some smaller companies that our analysts research thoroughly. And within the next week or so, there is one that we will be formally recommending, because of some announcements we believe the company will we making in the next two months.

Roger: Who is this?

Caller: I will give you my full contact information in a minute, but please let me finish.

Roger: May I have your name and the name of your company?

Caller: Now Roger, no one can predict what will happen to the price when those announcements start to flow, but I would like to call you at the right time, so that as a client, you may take advantage of our knowledge. Buying a few shares of a major oil company can establish the account, then we can move quickly on the smaller companies at the right time.

I never got the fellow’s name, since I hung up on him. But his pitch was familiar. It was reminiscent of cold calls that came in prior to the 2013 release of The Wolf of Wall Street.

Almost comedic, but perhaps disturbing, the call was the second one I received—with precisely the same script—in the past couple of weeks. Could the wolves be coming back? Have their prison terms ended? Perhaps it’s the perceived frothy Dow. Or maybe the fake news mantra. Or the newswire upstarts that make it ridiculously inexpensive, and often without traditional controls, to transmit press releases from virtually any source.

Most readers of this blog know better and would not fall for such scam calls. But beware, nevertheless. Hopefully, history is not repeating itself.

Roger Pondel, rpondel@pondel.com

IR Movie Titles

The Oscars are upon us, and while the awards have absolutely nothing to do with investor relations, it is uncanny how many movie titles could actually apply to a film about investor relations. Following is a list of old and new movie titles that hit the mark.

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Dances with Wolves
Trading Places
The Good, the Bad and the Ugly
Up in Smoke
Get Out
Hidden Figures
La La Land
St. Elmo’s Fire
The Founder
Revenge of the Nerds
Bonfire of the Vanities
Split
The Salesman
Chasing Amy
Frozen
The Boss Baby
Tequila Sunrise
Million Dollar Baby

Add to the list at #IRmovietitles.

 

Demise of the Sell-Side?

For years now, it has felt as if sell-side analysts were leaving their firms in droves…some moving to the buy-side, others to corporate positions as CFOs or investor relations officers, and still others to destinations unknown. A recent Financial Times (FT) article corroborated this “feeling,” reporting that the number of investment bank research analysts has fallen by one-tenth since 2012.  According to the article, these cuts are expected to continue.  Vontobel Asset Management’s chief investment officer said in the article, “we will have massive cost pressures in an industry that is not ready for it at all…they’ll have to gut things pretty hard.”

Back in the day of the dot.com bubble (when I was director of investor relations for an internet search firm), claims of biased research ran rampant. In fact, an analyst following my company was directly implicated, and I saw first-hand how new rules and regulations were needed to ensure sell-side coverage was not influenced by outside factors.  Next came the financial crisis, when “newly cost-conscious banks started slashing staffing of research departments, because they made little direct contribution to earnings,” said the Financial Times.

Additional changes are underfoot, according to the president and CEO of Westminster Research as told to FlexTrade Systems.  “The emergence of new research products has been largely data driven.”  Whereas in the past, analysts were generally responsible for covering a specific industry and stock, and reporting findings back to its clients, asset managers are now taking the data, “and interpreting it, making their own assumptions and coming up with their own ideas and create alpha.”

Sarah Gordon, business editor at FT, said in a recent article that, “most analysts’ research is not very good.”  She goes on to say that, “if greater transparency has not forced analysts to do a better job, other mechanisms must be tried.  Alternatively, the demise of sell-side research should be quietly celebrated.”  On the other hand, Stuart Kirk, a Deutsche Bank analyst, believes we should “expect a renaissance in research now things are heating up again,” according to a recent FT article.  Kirk says his expectation is based on increased research report readership, meeting requests and phone calls.  He claims that demand for research more than “doubles during periods of uncertainty such as Brexit or Donald Trump’s election victory.”

What does all of this mean for investor relations departments?  Certainly, attracting research coverage has never been easy, with no silver bullet to expand the number of analysts covering your company.  While it does not seem likely to get any easier with fewer analysts working with fewer resources, there remains considerable benefit to having sell-side support for your company.

Laurie Berman, lberman@pondel.com

Annals of Communication—Thank you, Dave

I had a breakfast meeting the other day at the Mid-Town Café on 56th between Lex and Third in New York City. It’s not a fancy place, but one of many non-descript diners where the waitresses call you honey as you walk in the door and ask if you want coffee as you are getting seated.

A view shows U.S. postal service mail boxes at a post office in Encinitas

The meeting was arranged by my long-time colleague, Gary Fishman, as a casual introduction to meet the principal of an investor relations advisory firm, similar to PondelWilkinson. For purposes of this blog, I’ll just call him Dave.

No need here to discuss our conversation, which is not the point of this piece, so fast forward to the end of our meal. (I had oatmeal and blueberries, the other two gents had eggs.) The waitress brought our check. All three of us made a move to our wallets. My credit card was out first, and with the total check being $19.95, I volunteered to buy. Then we went on our ways.

Within a couple of hours, I received a thank-you email from Gary for my time and for buying breakfast. I was going to email David to tell him how much I enjoyed meeting him, but thought I would wait a while, for certainly he also would be sending me a thank-you email…or so I thought. Then I forgot about it.

I returned to California, and the following day, I received a letter in the mail. It was from Dave, saying how much he enjoyed our visit and thanking me for playing host. In today’s era of speed, did I need instant thanks via email anyway? Probably not.

Receiving the letter struck a chord. While the message could have been precisely the same in an email, there’s something to be said for taking the time to send a letter through the U.S. Postal Service…it commands attention. Compared with hundreds of email messages that we all receive every day, it was the only personal communication I received via mail all week.

– Roger Pondel, rpondel@pondel.com

 

 

 

 

 

The Write Stuff

I recently taught a writing course at NIRI’s Fundamentals Conference, which is mostly geared toward IROs who are relatively new to the business, as well as more experienced folks who’d like to brush up on the basics.

My presentation focused on the fundamentals of writing earnings news releases, conference call scripts and shareholder letters. The biggest challenge people said they faced is crafting a compelling story in what has become a template-driven world.

Following are some boiled-down writing tips from my presentation to help make that writing resonate:

Know Your Audience

Your written piece should address the following:

  • What Information do they need?
  • Why do they need it?
  • What do they currently believe?
  • What should they believe?

Plan & Organize Your Content

  • Identify your key messages
  • Create and work from an outline
  • Use blocks of content to develop a sequence of thoughts
  • Test your sequence for clarity

Draft Without Judgment

  • Fill in the outline
  • Work quickly – don’t agonize
  • Read it out loud. Is the flow logical?
  • Listen to your own ears
  • Give it a rest and re-read in the morning

Revise for Power

  • Punch up the opening and closing
  • Change passive voice to active voice
  • Strip out excess words, phrases and fluff
  • Make it natural and conversational – should “fit” the company/spokesperson

– Evan Pondel, epondel@pondel.com