When attempting to articulate the exciting things happening within a business, management teams often rely on buzzwords and catch phrases to grab investors’ attention and paint a picture of the story they’re trying to tell. The problem, however, is that relying on clichés to bulk up your remarks often has the opposite effect. Having listened to thousands of conference calls, investors have heard it all before and view those hackneyed words and phrases as verbal fluff. Listed below are ten incredibly overused buzzwords that may sound exciting to you at first, but when used with investors, will fall on deaf ears.
Over time, all management teams want to build relationships, or at least a healthy rapport, with shareholders. Consistent execution of your business plan and proper communication with current and potential shareholders can help you build credibility, which in turn can bolster your company’s valuation and even allow your management team to earn “the benefit of the doubt” when things are not easy.
Last month, we looked at the top 10 ways companies can build credibility with shareholders. This month, we consider the opposite, and explore common ways companies get into hot water. Here are the top 10 credibility busters you want to work hard to avoid.
Posted on September 18th, 2013. Posted by Bob East
Legendary “60 Minutes” reporter Mike Wallace once said: “If there’s anything that’s important to a reporter, it is integrity. It is credibility.” The same should be true for every management team. Credibility with The Street – both on the buy side and the sell side – is an extremely important element in a successful investor relations program. In this month’s Top 10 list, we offer simple practices that help build and maintain corporate credibility.
First and Foremost: Under-promise and over-deliver.
Make sure your message and metrics are consistent.
Provide the appropriate level of financial transparency. Continue Reading
Smaller-cap companies, like many of those in the health services, life sciences and medical technology sectors, experience more volatile stock price action than some of their mid- and large- cap peers. These small companies tend to lack the liquidity of larger firms and are therefore more vulnerable to news events (and often, big price movements will occur for no reason at all). For the executives and investor relations professionals of these companies, such price movements can be gut-wrenching.
In their quest for a solution to stock price volatility, some management teams monitor stock price movements on a daily basis and try to find explanations for this movement. This short-term focus is often non-productive and can even be distracting. It’s better for executives to concentrate on building long-term, sustainable shareholder value by providing the Street with identifiable milestones and successfully achieving those milestones.
