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If …

Do you remember any of your elementary school teachers? Think back for a moment if any remain in your memory.

My kindergarten teacher at Bateman Elementary School, on the north side of Chicago, was Mrs. Hart. I only remember her because it was kindergarten, and she was my first teacher. No one went to pre-school in those days.

The next teacher I remember was Mrs. Castle, third grade, at Laurel Elementary School, in the heart of the borscht belt, near Melrose and Fairfax, in Los Angeles. I only recall her name because we just moved to LA, mid-semester, and I was the new kid in class. She was nice to me, even though I was a little behind in my knowledge of cursive.

Then we moved again when I was in the sixth grade, also mid-semester, and again I was the new kid in class at Lankershim Elementary School in North Hollywood. Not easy when you are painfully shy and eleven years old. But this teacher, Irv Sherins, was different.

Mr. Sherins paid lots of attention to me. He even assigned one of the kids, Dennis Gass, to be my buddy and show me around the school. (Dennis and I remained friends through high school. He enlisted in the Army right after graduation and died in Vietnam.)

You might be wondering what my memory of Irv Sherins has to do with investor relations and strategic public relations, which, after all, is what this blog is supposed to be about.

I so vividly remember Mr. Sherins – not because he treated me well and made me feel comfortable as the new kid in class – but because of a two-letter word he wrote on a corner of the blackboard, that was never erased. It was a word that has relevancy for our clients, our staff and corporate executives, among others, everywhere: The word is “If…”

Between today’s political stress, the coronavirus, and yes, the steep stock market decline, impacting valuations and business conditions worldwide, the meaning of that one small word written by Mr. Sherins more than 50 years ago, and never erased, can help all of us now. It was the first word and title of a famous Rudyard Kipling poem circa 1895. It’s interpretation by Mr. Sherins:

If you can keep your head while others around you are not…

Roger Pondel, rpondel@pondel.com

The Best Donut in Los Angeles

WARNING:  You have to read this entire blog post to know where to find the best donut in Los Angeles.

With third-quarter earnings season nearing its sunset, the year is practically over.  OK, OK, let’s not get too far ahead of ourselves.  But seriously, what does 2019 hold for capital markets?  Um, uh, well, that’s hard to say.  A few preliminary ideas from the IR observation deck:  Investors will care even more about diversity at the board level, cash preservation or lack thereof will weigh heavily on investors’ minds, and public companies will feel more pressure to perform on a quarterly basis to justify high stock valuations.

Indeed, these variables have already surfaced in 2018, particularly in California.  A California law passed in September that requires all publicly held companies based in the state to have at least one female board member by the end of 2019.  The law goes further by also requiring companies with at least five directors to have two or three female directors by 2021.

At the same time, continued volatility in the market and rising interest rates are influencing companies and investors alike to carry more cash on their balance sheet.  This trend will likely persist as the Fed partakes in gradual interest-rate increases in 2019.  That being said, investors don’t necessarily have the patience to watch a lot of cash sit idle on a balance sheet, so use it wisely.

Speaking of patience, high U.S. stock valuations will require companies to prove their pudding is still the best pudding around, and the onus will be on IR professionals to ensure that stellar financial performance is communicated effectively.

There are a number of other IR-related topics to consider for 2019, such as the continued effects of MiFID II, how artificial intelligence will influence IR, and the best place to eat a donut in Los Angeles when you’re on an NDR.  But for now, let’s just get through earnings season.

— Evan Pondel, epondel@pondel.com

Celebrating 50 Years

As our firm celebrates its 50th anniversary year, we thank our clients for the trust they have placed in us, and for allowing PondelWilkinson to help enhance value, build businesses and protect reputations.

It has been our privilege to work side-by-side with stellar management teams and boards of directors of companies big and small, established and emerging, global and regional.

When our firm was founded in 1968, it was done with a business philosophy based on four simple tenets: apply sound thinking to meet unique client challenges; attract the best talent, regardless of position; deliver quality, responsive service; and always operate in a respectful and ethical manner. That philosophy has endured.

Today, we pride ourselves on long client and staff tenure, with a collaborative, professional team that is the best in our business.  We are grateful to our referral sources for their confidence in recommending us.  And we extend deep gratitude to a vast network of wonderful people with whom we work every day on behalf of our clients, from investors and analysts, to editors and reporters, lawyers, accountants, and so many others.

Technology has transformed much of what we do, but our core competencies and the scope of our services remain highly focused, grounded in relevant experience: investor relations; strategic public relations; and crisis communications.

Aside from our day-to-day client work, in 2018 alone, we have been privileged to arrange highly successful investor days; stage business/financial media events and NDRs; develop communications for several mergers and acquisitions; and craft delicate, reputation-defining messages regarding a number of highly sensitive matters.

Tooting our own horn is not generally our style. We fully believe it is our role to be the rock, the secret sauce, the foundation behind the scenes, and have our clients shine brightly, center stage. But hitting 50 is a pretty big deal, and we know you will understand and share our exuberance.

So, to everyone we know, thanks for being there for us. We look forward to being there for you for decades to come.

Making the Grade for a Reg A+ Offering

Evan Pondel wrote a story in the May/June 2018 issue of IR Update on Regulation A+ offerings and what they mean for investor relations professionals. You can download a PDF of the story here.  Following are some IR tips for companies pursuing a Reg A+ offering:

  • Ensure that you are telling a story that individual investors will understand
  • Align with experts in public relations and digital marketing
  • Millennial themes tend to generate the most interest with respect to Reg A+ offerings
  • Answer investor questions via live phone conversations, email and FAQs
  • Exercise patience when speaking with individual investors
  • Apply Reg FD and consistent communication whenever telling the story
  • Under promise and over deliver

Building Better Media Relationships

Media relations are an integral component to what we do at PondelWilkinson, whether a public relations or investor relations engagement.

Crises aside, generating media awareness of corporate entities, their brands, products and services, among readers, listeners and viewers is critical to the success of any communications program.

Shrinking news departments, fewer beat reporters, and an increasingly tighter news hole, however, are making it harder to get reporters’ attention.

Another caveat to these challenges is that only 36 percent of journalists prefer to get their information from PR/IR sources, press releases, and newswires, compared with 42 percent last year, according to the 2017 Global Social Journalism Studycision-global-social-journalism-study

The good news is that experts and industry contacts remain key sources of stories for U.S. journalists. For example, while a reporter may not write about a new app or the latest software version, he or she may be more inclined to interview an executive about key technology trends, such as artificial intelligence or cybersecurity.

Media relations 101, right? Maybe not. According to the same study, only 19 percent of reporters say PR professionals provide high quality content, and just 37 percent are reliable.

Learning what’s important to reporters is vital to establishing long-lasting media relationships, essentially, helping them make their jobs easier.

Follow these simple rules for building successful media contacts:

  • Do your research, learn about the reporter and his or her area of coverage.
  • Customize your pitch, conveying why it’s important to the outlet’s audience.
  • Do not blast pitches.  Just don’t do it.
  • Provide value, such as proprietary content or a unique perspective or point of view.
  • Call first, if possible, especially since reporters are constantly inundated with e-mails.
  • Be transparent to foster credibility.

There’s no easy way to building better media relationships. It takes time, effort and a good sense of news, coupled with knowing what reporters want and need.

— George Medici, gmedici@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

 

 

 

 

 

What Does it Take?

Over the past several months, I’ve given a lot of thought to what it takes to be a good investor relations practitioner. After more than two decades of helping companies through the trials and tribulations of being public, I’m not that surprised that many of the following characteristics or traits that are important cannot be learned from books, on websites or through advanced degrees.

  • Knowledge: Strong working knowledge of financial statements/rules and regulations/capital markets. This one is a no-brainer. It’s hard to do the basics of investor relations without the requisite comprehension of what it means to be a public company.
  • Analysis: Always be ready to review a situation, operating peer or balance sheet with a sharp and analytical mind. Data is readily available, but proper analysis of that data is priceless.
  • Juggling: I don’t mean apples, balls or in the case of a former client, coconuts, but instead deftly managing deadlines, priorities and multiple personalities (hopefully from multiple people, not just one). If you work at an agency, extra points for having to do the above for many clients at one time.
  • Patience: When your stock is dropping, the phones are ringing off the hook and your email is pinging every 30 seconds, it’s important to remain calm when talking to investors and working with management to solve the problem du jour. Everyone has their own ideas, solutions and timelines, so being able to take in all of the information necessary to make the best decision with poise, is key.
  • Brevity: Executives and investors are busy. Say what you need to say quickly and precisely. Get to the point, and get out. This holds true whether your communication is written or verbal.
  • Strong Shoulder: There will be many times throughout your career when a colleague, client or senior executive needs a sounding board and someone to lean on. CEOs are people, too, so when a company is facing challenging times, or a solution is hard to come by, just being available to listen is immensely helpful. I have spent many afternoons as therapist versus press release writer, but those are the times I realize that I am truly part of the team.
  • Sense of Humor: When all else fails, laugh. It’s contagious. Almost nothing is insurmountable, so a little lightheartedness helps everyone reset and refocus. Investor relations is not an easy profession, so have fun with it.We’d love to hear what other traits are important. Let us know in the comments section.

— Laurie Berman, lberman@pondel.com

Observations of a Knock-out Investor Conference

Three people got punched in the face and knocked out at the 16th Annual B. Riley & Co. Investor Conference, held last week at a Hollywood hotel, directly next door to where the final episode of American Idol was being recorded at the same time.

It was not the kind of night-time brawl to which investors are accustomed. And fortunately, it was not investors who felt the sting of those punches.

Rather, in partnership with the Sugar Ray Leonard Foundation, B. Riley hosted the 6th Annual “Big Fighters, Big Cause” charity boxing night in conjunction with the conference. The event supports the Foundation’s mission to raise funds for research and awareness to cure Type 1 diabetes and to help children live healthier lives.

For an organization that is part of a fraternity generally known more for greed and making money for itself and its clients, it was refreshingly cool to be part of this invitation-only charity event, that featured food by Wolfgang Puck, an open bar, a world class auction of iconic memorabilia, and a rich environment for business networking.

As for the day-time part of the conference…it was pretty cool as well. More than 200 emerging and middle market companies from a wide range of industries presented to packed rooms of institutional investors, who journeyed to Hollywood from all parts of the United States.

Attendees were treated to chair massages with short lines, fun tchotchkes from sponsors— including a wide array of pens, flashlights, chocolate, ginger candy, key chains, cute little footballs and many glass bowls in which to deposit business cards, with chances to win even bigger items. As well, there was the option of skipping a presentation or two and sashaying down Hollywood Boulevard to gaze at the stars.

There were more men wearing ties than one would expect. There were more people showing off their new Apple watches than one would expect. And just as one would expect, there were many great presentations, and, of course, some boring ones.

It was a classy conference…one could say a knock-out conference in all respects, in which the presenting companies, the investors, the sponsors, and best of all, kids with Type 1 diabetes, all benefitted.

– Roger Pondel, rpondel@pondel.com

Business Folk

Most, if not all, annual reports for 2013 have been published by now, and as investors attempt to glean what went right and what went wrong by wading through pages upon pages of corporate detritus, often the most readable section is that containing the shareholder letter.

Warren Buffet is arguably the most famous writer of shareholder letters because of his folksy, straight-to-the point style.  Buffet is so darn good at writing shareholder letters that myriad chairmen and chief executive officers attempt to emulate his knack for prose. The problem is, Buffet writes in his own voice, and trying to inject his vernacular into your shareholder letter could smack of inauthenticity, or even worse, someone might call you a poser.

Instead of invoking Buffet when trying to conjure up some down-home writing, l’d rather refer to his style as “business folk.”  Yes, it sounds like a music genre for MBAs.  But writing in the style of “business folk” seems a lot less intimidating than trying to emulate a genius.

Following are additional word-buffing tips:

    • Avoid clichés and creative analogies.  Yes, it is tempting to use catch phrases and descriptors to tell the company’s story, but words can easily become distracting, and soon enough the reader loses focus.

 

    • Write as quickly as possible.  This ensures you are writing what you know and staying on point.  It also helps lay a foundation that you can wordsmith later.

 

    • Use metrics that help demonstrate themes.  Numbers are great because they are hard facts, but they also pose challenges because they don’t always tell the full story.  Try to use numbers that help shareholders understand the overall direction of the company.

 

    • Describe the company’s strategic direction.  Many executives underestimate the power of writing and misuse the activity, particularly in shareholder letters, to recapitulate old news.  Effective writing presents a roadmap that can help manage expectations, as well as demonstrate leadership.

 

    • Read what you write out loud to determine if it actually sounds like something you would say.  If you employ a lot of three-syllable words in your daily conversations, then maybe your writing should contain three-syllable words.  (Note: If expletives factor into your daily conversations, then you should edit those out.)

 

    • Use subheads to break up thoughts.  It is easy for readers to get lost in corporate minutiae, which is why it is helpful to have guideposts.  Subheads help hammer home themes we want investor audiences to remember.

 

    • Make sure whatever you write is in reader-friendly formats both online and in print.

 

    • Words are more important than flashy design.  Sure, an interactive quarterly report is nice, but it’s the words that will help investors determine if you have “a wonderful company at a fair price (rather) than a fair company at a wonderful price,” according to a quote from Warren Buffet’s shareholder letter in 1989.

 

— Evan Pondel, epondel@pondel.com

PW Participates in IR Certification Exam

First it was the CPA certification for accountants, instituted in 1917.

 

Then in 1963 came the CFA credential, administered by the CFA Institute, for finance and investment professionals, particularly in the fields of investment management and financial analysis of stocks, bonds and their derivative assets.

 

One year later, in 1964, the Public Relations Society of America, www.prsa.org, launched the APR designation as a way to recognize PR practitioners who have mastered the knowledge, skills and abilities needed to develop and deliver strategic communications.

 

Soon, investor relations professionals, courtesy of the National Investor Relations Institute (NIRI), www.niri.org, will have a test of their own. The designation has yet to be named, but development of the Body of Knowledge (BOK) is now underway, and the inaugural exam is scheduled for mid-2015.

 

The BOK is the basis for most certification exams, including the CFA. It forms the base of teachings, skills, and research in a given function, along with details on the essential competencies required of a practitioner based on a set number of years of experience.

 

It is with great honor that I am serving as an advisor to the NIRI committee preparing the first BOK for the investor relations profession.  I will be working directly with editor Ted Allen and a distinguished group of 25 investor relations professionals from throughout the nation who will write the definitive book—one that will represent every element of the requisite knowledge that will be tested in the IR certification exam.

 

It’s a big project and a tall order, especially for a profession whose practitioners require a wide range of knowledge, spanning disciplines that include finance, accounting, capital markets, news media, disclosure regulations, public relations practices and virtually all aspects of communications.

 

Canada and the UK currently have IR certification programs, and two U.S. universities—Fordham and the University of San Francisco—offer graduate degrees in investor relations.

 

While validation of competency through an exam or graduate degree may not guarantee practical success, we at PondelWilkinson are proud to have been asked to participate in this milestone endeavor for our industry.  I’ll keep you posted as the program develops, but please do not ask me for any answers to the exam—none of the BOK committee members will have access to it!

 

Roger Pondel, rpondel@pondel.com

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