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.
This article was originally published by national news wire service BusinessWire, a Berkshire Hathaway company, on its global blog July 9.
If you’re familiar with the British sci-fi fantasy series, Doctor Who, you know that a common plot device is the use of “perception filters,” in which aliens attempt to alter reality to reflect what they want you to see. A favorite episode is with actor/comedian James Corden, who lives on the first floor of what appears to be a normal two-story building – only the building does not have a second floor, just a scary alien machine parked on top of it with a perception filter designed to hide its existence.
Wouldn’t it be nice if we could use perception filters to influence how investors and financial analysts think about public companies? I am sure many management teams would love to use something like a perception filter to ensure that only positive things are said about their companies.
Alas, we all know this isn’t possible. And yet, one of the more interesting things I have observed over the years is how many management teams believe they already know what investors think of their companies – as if they have a perception filter firmly in place.
While many C-suite executives and corporate IR professionals dialogue often with the investment community and glean valuable insights from their conversations, it is a mistake to assume that investors will share everything that is on their minds. As Peter Drucker, the celebrated author, educator and management consultant, once noted, “The most important thing in communication is hearing what isn’t said.”
How, then, can management truly gain insight into what investors think? Enter the perception study, a tool designed to gather unique and candid feedback. It is only through the use of an independent third party that companies can truly get to the heart of what investors think. Third parties are able to create an environment that protects anonymity and are better positioned to share tough feedback with management.
Designing a Perception Study
There are many ways to design a perception study, which at its core, seeks to determine how investors view the company, its strategy, management team and IR program. Perception studies often are particularly useful before and after major events, such as an investor day, or when a company is in the midst of transition.
In most cases, many investor responses are surprising. Also in most cases, a good perception study pays off handsomely by revealing tangible and actionable items, along with nuances, of course, that facilitate communication and potentially valuation improvement.
Perception studies create opportunities to:
- Streamline business models that have become too complex.
- Simplify messaging to better resonate with the investment community.
- Improve an IR program in ways a company might not have seen.
- Provide benchmarks for future comparison.
- Let the investment community know that the issuer cares.
Dichotomy of Opinion
In a recent perception study we conducted for one of our clients, we found a fascinating difference of opinion about the company, with views that converged around common themes, but were almost polar opposites of each other. Interestingly, this dichotomy of opinion often was expressed by the same participant in the study.
For example, investors praised the management team’s ability to articulate the company’s investment attributes, but at times felt they could be too “promotional” in doing so. Investors also liked how the company positioned itself to capture emerging trends in its industry; at the same time, however, they believed the actions management took to take advantage of these trends made the business too complicated to grasp.
Perhaps most importantly, investors felt the company altered its strategy too frequently. While many praised management’s ability to pivot when the facts on the ground changed, the rate of transformation left investors and analysts wondering if management had a clear roadmap for the future, which, in turn, made it difficult, if not unnerving, for many of them to invest.
The perception study created an opportunity for our client to:
- Clearly articulate its business strategy, highlighting its vision for the future.
- Help investors understand exactly how management perceives the path to value creation.
- Simplify its story and improve consistency in metrics presented.
- Provide a candid discussion of business performance, both positive and negative aspects.
Understanding what investors and analysts truly think is a fundamental responsibility of the management team and board of any public company. Such knowledge provides tangible results and can serve as catalysts for positive change.
Jeff Misakian, firstname.lastname@example.org
It is nearly impossible these days to avoid SPACs, which most of you know by now stands for Special Purpose Acquisition Companies.
According to SPAC Insider, there were 226 SPAC IPOs from 2009 through 2019, compared with 248 in 2020 alone. No small potatoes as a financing vehicle, SPACs this year will experience yet another spurt of explosive growth.
Mark Y. Liu, partner at Akerman LLP, who hosted a recent webinar on the topic, said those 248 SPACs raised $83 billion last year. Amazingly, 550 SPACS were in registration as of March 31, 2021, looking to raise $162 billion more. And SPAC Analytics reveals that SPACs made up 55 percent of all IPOs in 2020 and 76 percent of those thus far in 2021.
Sometimes known as “blank check” companies, SPACs are typically publicly owned shell companies with no operations, but with mandates to acquire private operating companies, usually in a specifically stated sector. If the SPAC does not complete a transaction within 18-24 months, it is liquidated, and funds are returned to the company’s investors.
Trend or a fad?
While the numbers appear to say “trend,” Business Insider recently noted that investor appetite for SPACs is declining. Additionally, SPACs have come under scrutiny by the SEC over reporting, accounting and governance practices.
On the other hand, and supporting the trend side of the equation, Goldman Sachs estimates that that SPACs could drive $900 billion in M&A enterprise value in the next two years, with nearly $129 billion of SPAC capital currently searching for acquisition targets.
James Keckler, from D.A. Davidson’s investment banking group, and on the webinar with Liu, noted a few things to watch for on the horizon. He believes SPACs and their acquisition targets will get even bigger; that celebrities will continue to increase their involvement with SPACs; and that there could be multiple companies involved in a SPAC merger, versus the typical one-to-one model currently being utilized. Does that mean conglomerate?
The real question:
Are SPACs good for sponsors, the acquired companies and investors? The answer according to Liu, and others, is a resounding “yes” for all three.
For SPAC sponsors, the benefits include access to capital markets, founder warrants and common stock incentives, and the ability to use both cash and stock for acquisitions. For potential acquisition targets (this one comes from Covington Capital Management), the ability to skip the tedious process of filing a registration statement and bypass a roadshow is attractive. And for investors, the positives include redemption rights, $10 per unit liquidation value and liquidity.
On the downside, and not that much different from any company going through the IPO process, are the costs of going public, the reporting requirements, market oversaturation, and as some industry watchers have noted, SEC scrutiny (although this could be a good thing for investors).
Whether one is a SPAC investor, merging a company into a SPAC, or forming one, below are a few sound principles to practice:
- First, a public company is a public company. No matter the capital structure, management team or industry, all rules and regulations governing exchange-traded securities must be closely followed.
- Next, it is vitally important that communications are complete and transparent, both requisites to build credibility and a loyal investor following.
- Third, fourth and fifth, research the management teams and their backgrounds; understand what the investment opportunity is really about; and ensure that the language in all documents is easy to understand, with jargon kept to a minimum.
Lastly, although there are many more “secrets” that we readily share with our clients, please know that SPAC formation, merging, and investing are not necessarily quick ways to riches. Old fashioned performance, and maybe even going public through the tried-and-true method established by the SEC in 1933, usually will win out in the long-term. But for right now, SPACs are growing like Idaho spuds and loved by investors.
Laurie Berman, email@example.com
Roger Pondel, firstname.lastname@example.org
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:
- 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, email@example.com
Each year, the Wilkinson Memorial Scholarship is awarded to a first-year strategic public relations graduate student with an interest in corporate/investor relations and reputation management.
We recently had the pleasure to meet this year’s scholarship award recipient, Madeline Leon, a graduate student at USC Annenberg School for Communication and Journalism, who is now studying to obtain a master’s degree in public relations and advertising.
Cecilia Wilkinson, who passed in 2006, was a founding member of our firm, and has been honored since 2007 with an endowed scholarship fund in her memory for graduate students at the USC Annenberg School for Communication and Journalism.
“I am so happy I was awarded the scholarship!” said Leon. “USC Annenberg was my number one graduate school choice, and I’m grateful I will be attending with the support I need to accomplish my goals.”
Madeline is looking forward to using her expanded capabilities in communications to have a positive impact on nonprofit organizations and corporate social marketing. She currently is interning at the USC Annenberg Center for Third Space Thinking as a social media assistant.
Good luck Madeline!
George Medici, firstname.lastname@example.org
By this stage in the pandemic, most of you have spent time working from home. According to Deloitte, more than 40 percent of U.S. workers were working from home full-time as of June 2020. Further, on average, CEOs expect 36 percent of their employees to be working remotely in January 2022, up from 13 percent pre-pandemic.
Several companies have already implemented permanent work-from-home policies including Twitter, Facebook and even Nationwide Insurance, according to an NPR story. Forbes reported that Deutsche Bank plans to have staff work from home twice a week on a permanent basis.
I haven’t taken a scientific survey like Deloitte, but it’s probably safe to say that some love working from home, some hate it, and some merely tolerate it.
From dogs barking uncontrollably, garbage trucks rolling by and cats jumping into video meetings, things are certainly different these days. And while some of these distractions are funny, others can be quite inopportune. Think of the college coach who was being interviewed and purportedly flushed the toilet mid-sentence (something he denies). Or the boss who used a filter to turn herself into a potato during a Microsoft Teams meeting and couldn’t figure out how to disable the feature, so she spent the entire meeting speaking to her employees as a spud.
All joking aside, with many of us now working remotely, it’s important to make sure we are set up for success. Click here to read practical tips from Regus (the flexible workspace folks) to help make working from home a bit more comfortable. Below are some of my own:
- Make sure your workspace is working for you. Whether a sturdy chair or good lighting, you need to be comfortable to be productive.
- Personalize your space to feel energized and happy. Even if you’re working at a card table in the living room, little touches like plants and photos can make a real difference.
- Listen to music to ramp up productivity. Choose something calming that will allow you to stay alert, or blast rock or Cuban salsa if that helps you focus.
- Join an online community with others who are working from home to get ideas about how to make the most of your current situation and to feel less isolated.
- Create a routine and schedule time to step away from the computer (this important one is from The Kansas City Star).
Nobody knows whether working from home is a temporary fix or a more permanent in nature, but some very prominent CEOs have weighed in on the future of work. Fortune spoke with Satya Nadella of Microsoft, who said that collaboration needs to be reinvented, and that worker wellbeing needs more focus. In the same conversation, Accenture’s Julie Sweet mentioned that it is “absolutely critical” for businesses to be more responsible as digital acceleration continues. HP’s Enrique Lores said that, “As leaders, we all have changed. We all have learned how important it is to lead with empathy and build a different level of trust with our employees.” Consulting firm McKinsey summed it up nicely. “The virus has broken through cultural and technological barriers that prevented remote work in the past, setting in motion a structural shift in where work takes place, at least for some people.”
The pandemic work from home experience has been, and will continue to be, different for everyone. Let us know how you’re coping.
Laurie Berman, email@example.com
Having days of ups and downs? Divisiveness and polarization causing the blues? You are not alone.
A national survey we just commissioned on behalf of a client that provides tele-counseling to hundreds of anxious and stressed-out people each week shows that nearly 8 in 10 Americans are worried about the country’s future. The survey also showed that the mental health of 52 percent of American adults is suffering because of the election, to say nothing about COVID and other maladies.
“Americans need to be mindful of their mental health and find relief, otherwise, symptoms will only get worse and could lead to more serious health problems,” said Marianne Callahan, Ph.D., clinical and program director at The Maple Counseling Center.
Even if you think you can handle it on your own, we can all take a tip from my long-time friend and communicator extraordinaire Howard Kalt, who says, “Add a little music to your life.”
Studies have shown that music can lead to increased levels of dopamine in our brains. This is the same chemical that floods our noggins, making us forget about pain, mental or otherwise, and allows us to feel “high” when certain drugs are ingested. Jane Collingwood, a longtime contributing journalist to Psych Central, recently wrote, “Listening to music can have a tremendously relaxing effect on our minds and bodies and can act as a powerful stress management tool in our lives.”
Music releases endorphins. Shortly after the pandemic began, Howard launched a daily, endorphin-releasing music blog for his friends, SPEAKERS UP! Every morning, he dutifully issues a post on a different musical topic and genre, along with several relevant musical links.
I grew up in a musical family with a brother who is an accomplished jazz artist. This background does not mean I am never stressed or anxious. But when I saw the results of our client’s study, along with so much that has been written about the healing effects of music, combined with Howard’s daily music blog, it triggered my idea for this post.
And in true keeping with the mission of only posting articles on PW Insight that that relate to communications and investor relations, I am happy with this post to emulate Howard’s idea.
Relax, take a listen, and enjoy:
- Public Relations, by Jimmy Buffett https://www.youtube.com/watch?v=u_Dlmtq9CNo
- Money, by Pink Floyd https://www.youtube.com/watch?v=-0kcet4aPpQ
- Taxman, by George Harrison and Eric Clapton, https://youtu.be/y8OgkjcW0g4
- Busted, by Ray Charles https://youtu.be/N7ZjYbP6X8Y
- Time Is on My Side, by the Rolling Stoneshttps://youtu.be/_oSRvcdlgSI
- Communications Song, by Lior Porat https://youtu.be/mMSwMEzI8w0
Roger Pondel, firstname.lastname@example.org
I hope this email finds you well.
We all have come across this frustrating opening salvo at one time or another from some unknown person, touting a product or service that is of very little or no interest.
The good news is that email marketing campaigns have evolved. Technology and social media are enabling email marketers to deliver relevant content to intended recipients. The bad news, however, is that we are finding more emails in our inboxes.
And it’s only getting worse. According to Statista, the number of daily worldwide emails is estimated to increase to 319 billion next year, a 20 percent jump from the 269 billion sent in 2017.
When it comes to email marketing, our basic advice to clients, whether publicly traded or privately owned companies, is focused on content and consistency. Communications should be engaging and “on brand,” with a specific call-to-action, including click-backs to a website or online platform. Frequency also is important, keeping regular communications at a minimum, not overdoing it.
But myriad emails continue to arrive in our inboxes, creating a conundrum for many on whether to hit save or delete. Management experts and even psychologists advocate for zero tolerance on unopened emails. The theory is that a positive psychological effect occurs when completing the task of clearing an inbox, thereby making a person more productive, or at least feel that way.
Full disclosure: I currently have 2,782 unopened emails. That number pales in comparison to others, who have boasted amounts in the tens of thousands, even surpassing 100,000. For the record, I have seen all of my unopened emails. For us in the communications biz, think of it in terms of impressions. I’m constantly looking at emails to determine what needs to be opened immediately or saved for later. I do, however, delete “junk” most of the time.
I like to think of myself as super organized and very responsive, so cleaning my email inbox won’t necessarily make me more productive. Rather, I am relieved that perhaps one day I will need that email I saw months ago. It sounds silly, but my email inbox serves as a database, enabling me to search for past client-related communications, news stories, relevant research, conference opportunities, among many other topics.
There’s no one-size-fits-all approach when it comes to managing email inboxes. What’s important is that it works for the individual and does not jeopardize productivity, which is essential for managing today’s increasingly complex, multi-faceted, work-life business environment.
I hope this blogpost finds you well.
George Medici, email@example.com
Back in July, the SEC proposed new 13-F rules, including amending the reporting threshold for investment managers to “reflect today’s equities markets.” At first blush, the headline seems okay. When one digs deeper (actually, you don’t need to dig deep at all), the proposed rules represent a huge step backwards to a time when issuers and the investing public had very little information about stock ownership.
A little bit more about the SEC’s rationale before diving into the heart of the matter. According to its July 10 press release, the proposal would increase the 13-F reporting threshold from $100 million to $3.5 billion, “reflecting proportionally the same market value of U.S. equities that $100 million represented in 1975, the time of the statutory directive.” From everything I’ve read on the subject, this rationale is misguided and imprudent.
According to IHS Markit, approximately 600 of the 5,200 investment managers that filed a Form 13-F last quarter manage over $3.5 billion in equities. Put another way, almost 90 percent of investment managers that are currently required to report their holdings, would no longer be required to do so. Further, more than 90 percent of the dollar value of the securities currently reported is held by these 600 firms. IHS Markit also noted that, on average, 55 percent of the investors on an issuer’s shareholder list would stop filing 13-F’s, 69 percent of the hedge funds on an issuer’s shareholder list would stop filing 13-F’s, and “IR Immune investors,” including index funds, quants and brokers would stop filing for 2 percent of their share value, while active investors would stop filing for 10 percent of their share value. Not good for an industry that requires more visibility, not less.
The National Investor Relations Institute (NIRI), has aggressively taken up the cause, rallying issuers, IR counselors and other prominent business associations. Last week, NIRI sent a letter to the SEC opposing the proposed rule. 237 issuers with a combined market cap of almost $3 trillion, five high-profile business associations and 26 IR counseling firms signed on in support. Additionally, NIRI reports widespread opposition from retail investors and small investment managers, who, in total, have submitted more than 1,000 comments to the SEC.
It’s not too late to take action, even if you’ve already signed on to NIRI’s letter. The deadline for submitting comments directly to the SEC is September 29. You can visit NIRI’s Advocacy Call to Action page for more information and suggestions on how you can help.
The SEC’s proposal would significantly hamper issuers’ ability to understand who owns their stock, who is selling their stock and who is buying their stock. Imagine a scenario in which an activist is slowly building a position, but you can’t see it happening and you are blindsided by a takeover attempt. Imagine how difficult it would be to keep current holders updated if you don’t know who they are. Imagine the inefficiency of having no way to prioritize incoming phone calls and meeting requests because you are in the dark about ownership status.
Perhaps Jim Cramer said it best. “If you believe Wall Street is important, if you believe business is important, if you believe the market is important, then the public deserves to know who owns what.” Use your voice to let the SEC know that you strongly oppose the proposed rule.
Laurie Berman, firstname.lastname@example.org
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, email@example.com
Public Companies Prosper in Pandemic
20 Jul 2021
Performance Rules, but Perception is Everything: How to Know What Investors Truly Think About Your Company
12 Jul 2021
SPACs: No Small Potatoes, and Still Growing Like an Idaho Spud
3 May 2021
Almost There and Entering Yet Another New Comfort Zone
17 Mar 2021
Celebrating Our Past with an Eye on the Future
28 Jan 2021
Home is Where the Heart (and Office) Is
1 Dec 2020
WHO WE ARE
PondelWilkinson Inc. is a leading investor relations and strategic public relations firm that has earned a national reputation for innovative, aggressive, professional service.