What IR Practices Horrify You? Top 6 Scariest Investor Relations PracticesOctober 31st, 2012 by Jon Bey
Happy Halloween everyone! At this time of year, with the ghouls and goblins on the prowl, I thought I would point out the Top 6 Scariest Investor Relations Practices I see on a regular basis. As an investor, when I begin to research a company, I have a process I go through when vetting all potential deals. When it comes to the Investor Relations component, I am still shocked at how many companies make horrifying mistakes. Here are the Investor Relations Practices that scare me away from a potential investment:
6. The Shadowy, Uneducated IR Professional
It still shocks me that there are individuals representing companies in an IR role that have no idea of what they are doing. Don’t get me wrong, I know everyone starts out ‘green’, and most people learn on the job, but I encounter some individuals that have been in the industry for a few years, and have yet to make the effort to educate themselves. Time to take a course, read a book, and join your local NIRI or CIRI chapter.
5. Ghastly Websites
The corporate website is the most important marketing piece a company controls, but yet I still see alarming websites every week. I shake my head, and move my attention to the next company immediately. If a company still does not understand how valuable their website can be, and the damage it can cause if it is outdated, then they don’t deserve my time or money.
When I talk to a CEO, or an IRO, I fully expect to see their passion, and hear how great their project is. What turns me off a project is when the IRO goes beyond the investment opportunity and turns into the wicked, used car salesman. Give me the facts, save the hard sell, and don’t tell me if I don’t get in on the deal today, I will miss the stock jump coming this week.
3. Haunted Social Media Deniers
Social Media and Social Networking is growing rapidly, and I hope to see the companies I am looking at least taking steps to monitor what is being said about their company. If the senior executives are burying their heads and ignoring the potential opportunity, I question their commitment to Investor Relations. If the IROs are doing this as well, then I move on to the next deal. The IRO may be having trouble convincing the C-Suite, but they need to be trying, and there are several things they could be doing on their own with little time commitment, and for little money.
2. Vampiric Social Media Companies
On the other hand, things get really creepy when I see a Social Media Company running a campaign for a public company that has no understanding of security commission regulations, or exchange rules. If you are going to hire an outside firm to help you with your Social Media campaign, and there are a lot of good ones, make sure they understand your company, industry, and the proper rules of your stock exchange. The last thing your company needs is to get flagged by the regulators for being perilous with your tweets, and comments made in the social media space.
1. Ghostlike, No Investor Relations at All
Yes it is true; there are still public companies that don’t understand the value that an educated Investor Relations professional can bring to their company. Some tell me the IR is handled by the CFO or another executive, and others don’t believe the value add is worth the expense. Some have had a bad experience with a poor IRO, and don’t know where to find a qualified professional. I always advise them to give it another shot, and to search for a qualified IRO through their local CIRI or NIRI branch. CIRI has just graduated their first class of Professionally Certified Investor Relations Professionals through the IVEY School of Business, take a look here for a qualified professional.
I wish you a spooky Halloween wherever you may be, and please add to our list, What IR Practices Horrify You?
All the best,