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Prepping for Investor Conferences

With the 2014 investor conference season about to go bananas (J.P. Morgan’s behemoth healthcare conference hits Jan. 14), it is probably a good idea to do a little prep work before spending all that time and money on the road.  Think of it like going to sleepaway camp; you got your sunblock, check, bathing suit, check, toothbrush, check, compelling investor presentation, um …
 
OK, so unless you were the ultimate dork at summer camp, you probably didn’t bring an investor deck with you.  The point is it is absolutely critical that you have the right mindset and materials before you embark on the conference circuit.  Following are a handful of tips to consider:
 

  • Make sure your investor presentation reflects the kind of company you are right now.  Many of us get attached to clever graphics, analogies and even metrics that are no longer relevant to a story.  A few substantial tweaks could make all the difference when it comes to keeping investors engaged.

 

  • Manage your one-on-one schedule.  It is easy to feel pressured by your hosts to sit with everyone on your schedule, but not all of the folks who want to sit with you are interested in investing in your company.  Some are looking for industry trends or even making a bet that your company’s stock is headed south.  Bottom line: Keep a close watch of your schedule and feel free to say no and request a new meeting.

 

  • Piggyback NDRs.  Traveling is expensive, not to mention time consuming.  So, if you’re headed across country, let’s say to NYC, perhaps it makes sense to also do a day of meetings in Boston or Philly.  Or better yet, maybe an analyst from a different bank would like to set up a dinner in NYC after your conference.

 

  • Sleep well and eat right.  OK, I’m an IR guy, not a nutritionist.  But I’ve seen it before, the executive who has been up all night working, eating crappy food, and throwing back one too many glasses of scotch.  And then comes the investor presentation, at which point you can hear all of the air being sucked out of the room because the speaker has no energy.  I’m not saying stop drinking scotch, but I am saying it’s important to take care of yourself.

 

  • And finally, take notes and ask questions.  We usually assume that investors are the ones asking all of the questions, but maybe there is some insight to be gained if management teams ask investors questions.  Investors sit with hundreds of management teams and likely can impart a few nuggets of their own.

 
– Evan Pondel, epondel@pondel.com

Q&A with L.A. Business Journal Reporter

Business reporters play an important role in helping investors identify opportunities. PondelWilkinson caught up with James Rufus Koren, staff reporter of the Los Angeles Business Journal, to shed light on factors that influence his coverage of the banking and finance world.

 

James Rufus Koren, reporter with L.A. Business Journal

James Rufus Koren, reporter with L.A. Business Journal

1. How are social media influencing your coverage of companies?

 

I don’t know that it has changed the game that terribly much because of the type of niche business publication we are. We don’t do a lot of breaking news. We are looking for the analysis story; the exclusive deep read on what’s going on.  I also don’t find social media the best way to get information about banks. The three sentences at the bottom of a 10K are usually much more insightful. That said, if we are looking for a lead, I will search through Twitter to see if anyone is tweeting about a company or I’ll read blogs to see if anyone is talking about a company.

 

2. What characteristics make for a compelling story in the Los Angeles Business Journal?

 

Growth, change and new strategies that speak to the local economy are interesting to me. Big names are also interesting. For example, if Charlie Munger is doing something, we will probably be more interested than if Evan Pondel is doing something (laughter). But often times, what interests me may not interest another reporter. I like to explore parts of the banking and finance world that are not well understood. I look for things that I don’t understand and then try to take a crack at it.

 

3. How would you define an ideal source?

 

An ideal source is someone who is deeply in the know not just about their company or their particular corner of the world but also has a broader knowledge base and a big Rolodex. It’s very helpful when someone can say, ‘hey there is something interesting going on here that you should look at,’ such as a particular sector of the economy. An ideal source is someone who will give you information without the expectation that it will result in something immediate, or something positive for them.

 

4. How do you like to be approached about prospective stories?

 

In general, email is the easiest, but the ideal approach is developing a relationship with me. If you have been helpful in arranging interviews, I am more likely to follow up on story ideas. Sending gifts does not ensure a good story. A number of interesting things come into this office. Thankfully, no one has sent me a fish wrapped in a newspaper.

 

5. Where do you foresee the future of business journalism going?

 

I actually see business journalism continuing to connect with people in more real ways than other kinds of journalism. Many people have a hard time seeing the direct impact of stories about state and local politics, but people who read business stories want information so they can make wise decisions about their money.

 

6. How do you react when a call is not returned?

 

It depends on the information I left in a message. In general, I interpret it as the person has nothing to say for themselves, or that I have things pegged well enough in a story and the person cannot benefit from getting in touch with me. Also, as a business journalist, I understand the limitations of public companies and that certain things cannot be disclosed.

 

– Evan Pondel, epondel@pondel.com

 

Cashtag Blues

Last summer, with relatively little fanfare, Twitter added clickable stock symbols to its tweets.
This is how it works: Add a “$” in front of a ticker symbol in Twitter’s search box and you’ll be able to engage in conversations about a particular company, similar to what would happen with a hashtag “#” followed by the name of your favorite pop star.

twitter
In social media circles, introducing the “cashtag” is yet another way to stimulate chatter among people
who are interested in a particular topic, such as public companies. But like all seemingly helpful social media tools, the cashtag may, in fact, send your stock tumbling down in 140 characters or less.  We recently observed such a scenario.

Shortly after market open on an otherwise average trading day, an anonymous tweet began surfacing about an FBI raid on a certain public company.  Soon the company’s trading volume began rising and its shares began
dropping, so much so that, as IR representatives for the company, Bloomberg called us to find out if the rumors on Twitter were true.  We confirmed that the rumors were false, and soon the stock corrected itself.

We later learned that the SEC opened an investigation on the tweeter for a possible “10b-5” infraction, which is when someone makes fraudulent claims in connection with the purchase or the
sale of a security.

Rumors surrounding public companies have been swirling about the Internet long before the cashtag, but this example serves as an important reminder that new information channels, carrying potentially market moving information, are reaching influential audiences at light speed.  And that means the onus will increasingly fall on investor relations professionals to ensure chirping birds are not making fraudulent claims.

 

Evan Pondel, epondel@pondel.com

Iran Sanctions Affect Public Companies

It’s a little disconcerting when you think about it, but interesting nonetheless how politics and the world order is infiltrating corporate life.

Iran Elections

Iran Elections (Photo Credit: Flickr: bioxid)

 
This month, public companies must begin reporting–in quarterly and annual reports to the SEC– transactions that they or any of their affiliates have with Iran.  In turn, if such a report is filed, a federal investigation will be triggered.
 
The new mandatory reporting requirement stems from passage last year of the Iran Threat Reduction and Syria Human Rights Act of 2012, signed into law in August by President Obama.  The website www.govtrack.us called the Act a strengthening of Iran sanctions “for the purpose of compelling Iran to abandon its pursuit of nuclear weapons and other threatening activities.”
 
Previously, the SEC’s Office of Global Security Risk was charged with monitoring public companies’ activities that could relate to any of four countries–Iran, Syria, Sudan and Cuba–designated by the State Department as “sponsors of terrorism.”  Now, issuers are required to make active disclosures relative to Iran, rather than merely respond to SEC inquiries.
 
The major news outlets haven’t said too much about the new Act, which, granted, will impact only a relatively small percentage of the thousands of public companies–mostly shippers, financial institutions,
insurers and reinsurers. Nevertheless, how such companies ultimately communicate their Iranian transactions and the ramifications on their stock prices and customer reactions will be fascinating to watch.

 

Roger Pondel, rpondel@pondel.com

Relate to the Public

photo2.JPG

 
Sometimes in order to practice public relations, you actually have to relate to the public. Today our firm visited the Daybreak Day Center, a place that provides food, shelter, clothing and showers for mentally ill homeless women.  We made lunch as a team for more than 20 women, had conversations with staff and volunteers, and shared a meal with some of the most courageous people we’ve ever met.
 
 

PondelWilkinson Wins Two PRism Awards

PRism Awards

 
PondelWilkinson received two PRism awards this week at the 48th Annual Public Relations Society of America – Los Angeles chapter awards show.  The awards recognize reputation/brand management in investor relations for Market Leader, Inc. (Nasdaq: LEDR), a provider of online technology and marketing solutions for real estate professionals, and digital PR tactics/webcasts for Physician Therapeutics, a division of Targeted Medical Pharma, Inc., which is a specialty pharmaceutical company that develops and sells prescription medical foods for the treatment of chronic disease.
 
 

IR in Politics

 
Business folks usually don’t talk about politics, but politicians love to beat up on business.  During the debates, Romney took Obama to task on unemployment, and Obama ribbed Romney about his tax rate.  And yet, we haven’t seen any business leaders lambast the two candidates about the gobs of money they’ve spent to win the hearts of voters.
 
So far, Obama has raised approximately $934 million, versus Romney’s $881.8 million, according to the New York Times.   Between the two of them, we’re talking close to $2 billion, and that doesn’t include a whole bunch of money spent in support or against the candidates by committees, nonprofit groups and other super PACs.
 
In PondelWilkinson’s world, investors are constantly holding executives from public companies accountable for expenses and how well they can manage their income statements and balance sheets.   Votes in favor of a company’s financial performance usually result in rising shares.  The opposite is true for lackluster performance.
 
While racking up campaign expenses isn’t directly analogous to a company’s handling of SG&A, it strikes me as hypocritical when presidential candidates spend hundreds of millions of dollars to harness an asset (our country) that is ailing from the very same spendthrift ways that contribute to our nation’s growing deficit.

 

Evan Pondel, epondel@pondel.com