Today, after the Corporate Comm class, I immediately rushed home. Didn't go to Harvey Nichols to make sure those Miu Miu shoes were still there. Didn't go to check out the new Vanity Fair exhibition at the Portrait Gallery. I simply couldn't wait to get home and read more about investor relations!
Some of you might assume that, by writing in this manner, I am sucking up to my tutors. How wrong and how pathetic !
Anyway, let's get down to business. Today I learned that one of the main objectives of Investor Relations (IR) is helping reduce stock price volatility. Typically, cost of debt capital is lower for companies with the stable stock price. Thus, IR managers can help that price stay stable by
Some of you might assume that, by writing in this manner, I am sucking up to my tutors. How wrong and how pathetic !
Anyway, let's get down to business. Today I learned that one of the main objectives of Investor Relations (IR) is helping reduce stock price volatility. Typically, cost of debt capital is lower for companies with the stable stock price. Thus, IR managers can help that price stay stable by
'optimizing the company's shareholder structure to include primarily long-termSo, the geniuses of financial PR should be expected to devise an effective communication strategy targeted at their company's shareholders and, when necessary, prevent them from running off by the power of word;)
owners of the stock.'
Another simple & helpful recommendation:
Do not spend time communicating with uninterested investors.Just like in marketing, our audience (investors) should be divided into smaller segments: by style (growth seekers vs. value seekers, index, income, etc.) or by turnover (high, moderate, low). They need to be approached differently. However, sometimes segments merge. For example, in order to minimize risks and diversify the portfolio, some investors have more than one style: they might buy both the value stocks and the promising growth stocks, etc.
Then, there are our intermediaries: the financial press, the analysts, and the rating agencies. All seem to matter greatly.
A lot of attention has been paid lately, at least in the USA, to the conflict of interest in the job of a sell-side analyst working for an investment bank. In the past, some reputable american analysts were encouraging public to buy certain stocks, while, in narrower circles of their employer-investment banks, calling the same stocks "junk". This lucrative co-op came to an end with several loud scandals and a new set of regulation, prohibiting tight links between analysts and investment banks.
A lot of attention has been paid lately, at least in the USA, to the conflict of interest in the job of a sell-side analyst working for an investment bank. In the past, some reputable american analysts were encouraging public to buy certain stocks, while, in narrower circles of their employer-investment banks, calling the same stocks "junk". This lucrative co-op came to an end with several loud scandals and a new set of regulation, prohibiting tight links between analysts and investment banks.
Finally, I was really surprised to learn that in 70% of companies (mostly USA)
Corporate Communications departments still report independently of the Investor RelationsHow come they do not see the connection?
References: Argenti P. Corporate Communication. Fourth Edition. McGraw-Hill. New York. 2007
