Posts

Public Companies Prosper in Pandemic

PondelWilkinson’s CEO Roger Pondel was interviewed by Reporter Mark Madler of the San Fernando Business Journal for a special report titled, “Public Companies Prosper in Pandemic.” Read the full story below.

Almost There and Entering Yet Another New Comfort Zone

One year into the pandemic, it is clear that our personal and business lives have changed in so many ways, some of which will become permanent. We were forced to step out of our comfort zones, and what became a new comfort zone for many is about to change again, this time in a positive way. We are almost there.

Over the recent months, PondelWilkinson conducted an anecdotal survey among those with whom we regularly interface – corporate executives, analysts, business journalists, investors, among others. We asked about comfort zones and life changes.

Sans reciting statistics, here are some random thoughts of what we learned, in no particular order:

Photo credit: Roger Pondel
  • Most people are working odder and longer hours from their home offices, but with generally less stress.
  • We are seeing our clients much more often, albeit not in person.
  • Productivity has improved significantly, with no more time wasted on daily commuting and out-of-town business trips.
  • Zoom fatigue is far less taxing than jet lag fatigue.
  • Lunch times have gone to about 15-20 minutes from about 45 to 60 minutes, and to a feeling of almost being free from an average daily spend of about $15.
  • It ispossible to complete financings, including IPOs, 100 percent virtually.
  • It is possible to do a non-deal-road show in one’s pajama bottoms. “I will never do an old-style road show again,” quipped more than one CEO and CFO.
  • Activist investors built foothold positions during the early pandemic stages when valuations tanked. Today, those investors are beginning to flex their muscles and raise their voices.
  • Retail investors, with more time on their hands, are investing more and taking up more of management’s time.
  • A new investor spotlight is shining on ESG considerations, and companies need to pay attention.
  • Many annual meetings will remain virtual from now on. Chocolate chip cookies at those meetings are pleasures of the past.
  • M&A transactions came to a halt, but they are roaring back.
  • Fewer cocktails are being consumed. Huh?

Most respondents said we are “almost there,” meaning back to some degree of normalcy. But most believe that a majority of the populace will continue to wear masks for years to come, particularly on airplanes and in group meetings, and certainly for the remainder of 2021.

About stepping out of one’s comfort zone, my therapist wife is an advocate of doing so purposely, especially in times like these. While there has been no choice about accepting changed routines, she believes it is critical to proactively embrace them, along with seeking new challenges. More than that, she says, “It is proven that those who regularly step outside their comfort zones become more emotionally resilient and creative and hold distinct cognitive advantages over those who do not.”

Aside from working at home, I recently stepped out of my comfort zone in a number of ways. I have become a bird photographer on early morning jogs. I now bring out the garbage without being asked to do so, almost every day. I help with the dishes, almost regularly. And sometimes, I even surprise my wife by making the bed … a tip for which I must give credit to our long-time corporate counsel, Gary Freedman.  

“Increasing the number of tasks one can handle and doing altogether new things propels personal and professional development,” Fay Pondel says. “Getting comfortable with being uncomfortable stimulates innovation. Embracing the unnervingly unfamiliar opens oneself to accomplishing more than ever dreamed possible and leverages untapped potential.”

Are we back to normal yet? Almost.

Roger Pondel, rpondel@pondel.com

When the Viral Fog Lifts

Those who live in Southern California fully understand the terms “May gray” and “June gloom.” It’s that time of year when the sun comes out late afternoon. The temperature isn’t that cold, but gloominess permeates the air and stays around for most of the daylight hours. Most people hate it.

This year, at least for those who live in Los Angeles, the pre-summer grayness is no big deal. There’s a lot more to complain about than the weather.

Regardless of who you ask, or what television news station you watch, when that sun is fully bright again, there is consistent agreement that a “new normal” will surface. I am not one for pontificating about what’s ahead, especially when so much of the future remains racked with uncertainty. But in our niche of investor relations and strategic public relations, I will throw caution to the wind and make a few prognostications about how our sector already is transforming:

  • Few, if any, in-person non-deal road shows (NDRs), but plenty of virtual ones. CEOs and CFOs will love that. It will keep them in the office and save lots of time, to say nothing about eliminating many expenses, like air fare, hotels, limos, fancy restaurant meals. Virtual NDRs are in. They may be easier to schedule, but they must be visual and engaging to hold interest. Hello Zoom.
  • Virtual annual meetings already are the new norm. They will be on the rise and probably never go away. CEOs and CFOs may like that, too, but investors may not. Management will control the question and answer chat button, and the democratization of public companies may take one giant step backward. So watch carefully for a rise in activism for those companies that aren’t communicative and transparent, aren’t performing and aren’t unlocking shareholder value.
  • Desk-side briefings with journalists are history. There are fewer business journalists these days, anyway, and their time has become quite limited for casual background coffee klatches. A phone call or video interview will have to do, but there had better be something cogent to say.
  • Quarterly conference calls will become even more important. But management teams sorely need to interject more life into their presentations and not merely recite numbers. Yes, they will likely still be scripted, but it would be better if they could be turned into quarterly Zoom fireside chats for the Q&A portion.
  • Investor days are still important, but as with annual shareholder meetings, for the foreseeable future, they will be virtual. This will save money, possibly attract more attendees, and eliminate the free-lunch bunch. But to be effective, they need to be live, and engage with the audience, or attendees will be distracted while management drones on.  
  • Virtual investor conferences already have arrived and will likely increase in number. But be careful which ones to attend, either as a presenter or an investor. They can prove to be a waste of time. From the issuers’ perspectives, it’s important to know who’s really paying attention. Is anyone really listening? Sponsors should do whatever it takes to do it right, such as using video to make it worthwhile and come alive.
  • Assure that “out-of-sight, out-of-mind” syndrome does not set it. With much of the above happening in the privacy of one’s home office – or at least not in the offices of investors and analysts – greater attention must be paid to messaging for those who are listening.

The times, and the market, are changing fast. Balance sheets are more important than ever. Investors are looking for corporate measures to assure that capital is being deployed in value-accretive activities. With fewer, if hardly any, companies providing financial guidance, investors want to see actions that can translate into trackable metrics. They want to hear from management teams more often, and perhaps in new, or old, ways, like maybe bringing back the quarterly report. And once regarded principally as feel-good commentary, stockholders today look increasingly to investing in companies that focus on environmental, social and governance measures.

Unlike a CEO of a publicly traded company providing financial guidance on a quarterly earnings call – with significant consequences if wrong – no real harm has been done if my forecast for the future of investor relations is wrong. And maybe, just maybe, if I am right, the transformation will be good for all when the viral fog lifts. Except, of course, for missing some great meals in those fancy New York restaurants while on an NDR.  

Roger Pondel, rpondel@pondel.com