There’s a saying in investor relations: “You date your investment bankers, but you marry your research analysts.” Essentially, this means that a sell side analyst who covers your company will remain your partner for the long run. Investment bankers, on the other hand, work with a long list of companies and deal with jam-packed, demanding schedules. They don’t disappear after the initial public offering (IPO), but the time they can devote to your company diminishes.
The Westwicke Blog is designed to deliver information and insights into the ever-changing world of healthcare communications.
A well-planned and executed research and development (R&D) day can reinforce a company’s message, heighten a company’s visibility, and allow a management team to highlight their investment thesis. It can be an effective and efficient investor relations tool if done correctly.
Properly handled relationships with Wall Street analysts can play a key role in a company’s investor relations plan and overall success. However, missteps can create unnecessary problems — especially considering that analysts may share anything you say with the public markets — so executives should approach these relationships carefully. Use the checklist below to maintain effective analyst communications.
Any company that finds Wall Street analyst estimates out of line with its own financial projections faces a potentially risky perception problem. How management handles the situation can determine whether they reassure investors or lose credibility with the Street.
Who doesn’t want new analyst coverage for their stock? As new coverage is generated, your stock becomes more visible, which, in turn, can potentially create more demand. When strategizing on which analysts make the most sense to cover your stock, there are several factors to consider. First and foremost, the main thing you should keep in mind is that getting the analysts you want to follow your stock is usually challenging and can typically take time, so set your expectations about new analyst coverage accordingly.
Over the past few months, much has been made of the new MiFID II regulation and the impact it will have on Wall Street, and ultimately, public companies. While it has been in effect since the beginning of the year, we’ve only just begun to experience the impact. We’ve heard stories of lower trading commissions to Wall Street firms; seen buy-side accounts changing the way they compensate sell-side analysts; and caught wind that some of the largest buy-side firms are building out their own corporate access departments.
Many of the MiFID II-related news articles published to date are vague and draw uncertain conclusions about its impact. With that in mind, we want to take this opportunity to outline exactly how we think MiFID II will play out, and provide guidance to senior management to help them thrive under this new world order. Here’s how we see this new regulation snowballing in the coming months.
MiFID II is a term you are bound to hear more often over the second half of 2017. It is the European Union’s Markets in Financial Instruments Directive II, a financial services regulation in the EU that will unbundle broker/dealer research and corporate access services from execution services. It is scheduled to become effective on January 3, 2018.
As an executive of an American public healthcare company, you might be asking yourself why you need to be aware of a European regulation. The answer: Because many major institutions operate on a global basis, the impact, while initially centered in Europe, will ultimately be felt in all corners of the global financial markets.
At some point during your company’s growth, you will need to share sensitive data with investors and financial professionals by using a data room. In the old days, a data room was just that: a room filled with printed files and reams of paper containing patent descriptions, clinical data, and financial projections.
Today, data rooms are usually virtual. And with hackers increasing their efforts (and their ability) to steal sensitive data, it’s vital you consider security as well as service and convenience as you evaluate data room solutions.
With our colleagues at NASDAQ, we recently co-hosted an informational luncheon for private-company CEOs and CFOs on the IPO process. Guest speakers included a life science venture capital investor and a CFO of a company that went public in 2016.
The management teams in the audience for the well-attended event had plenty of questions for our guests, on everything from how to prepare for an IPO to avoiding pitfalls to making the transition to being a public company.
Our speakers had much to say. Below are a few of their most important pieces of advice:
Dining with one of your analysts can be nerve-racking, but it really doesn’t need to be.
Sharing a meal at a restaurant should make for a less formal meeting than one conducted in a boardroom. The mood should prove to be friendlier and less business-like, and conversations rarely venture deep into the numbers.
Over dinner, analysts frequently probe for “color” related to previously disclosed themes to gather the kind of details that can animate their coverage and talking points for investors.