Running an Effective Investor Relations Department

Preface xi About the Author xiii Chapter 1: Managing Investor Relations 1 Why Have an Investor Relations Department? 1 Investor Relations Objectives and Goals 2 Investor Relations Tools 3 Investor Relations Budget 6 Float Management 8 Managing Bad News 10 Responding to Rumors 14 Summary 15 Chapter 2: Investor Relations Officer Position 16 Key Aspects of the IRO Position 16 IRO Job Description 19 Investor Relations Team 21 IRO as Management Representative 22 Summary 23 Chapter 3: Creating the Company Story 24 Creating the Story 24 Packaging the Story 26 Strategic Credibility 29 Clarifying and Mitigating Risk 30 Company Reputation 32 Matching the Company to the Story 34 Duration of the Story 34 Coordination with Public Relations 35 Summary 35 Chapter 4: Event Management 37 Conference Call 37 Road Show 41 Non-Deal Road Show 46 Annual Meeting 47 Plant Tour 49 Annual Analyst Meeting 49 Analyst and Industry Conferences 50 Podcast Dissemination 50 Video Dissemination 52 Blog Dissemination 52 Event Disclosure Issues 53 Practicing for Events 54 Summary 55 Chapter 5: Public Communications 57 Constructing a Press Release 57 Dealing with the Media 63 Dealing with Electronic Message Boards 66 Investor Relations Advertising 67 Summary 68 Chapter 6: Publications 69 Fact Sheet 69 Annual Report 74 Product Pipeline Report 77 Company-Paid Research Reports 78 Independent Research Reports 78 Welcome Kit 79 Videos 79 Other Publications 80 Information Tracking Systems for Publications 81 Legal Liability 82 Summary 82 Chapter 7: Investor Relations Web Site 83 Basic Investor Relations Web Site 83 Intermediate Investor Relations Web Site 84 Advanced Investor Relations Web Site 87 Web Site Layout 90 Hyperlink Liability 91 Sample Web Sites 92 Summary 93 Chapter 8: Management Discussion and Analysis Section 94 MD&A Reporting Requirements 94 SEC Guidance 98 Examples of Enhanced MD&A Disclosure 99 A Case for Full Disclosure 101 Summary 102 Chapter 9: Disclosure 103 Form 8-K 104 Disclosure of Non-GAAP Information 111 Regulation FD 114 Disclosure Policy 115 Disclosure Procedure 117 Ensuring Compliance with Disclosure Rules 118 Disclosure During an Initial Public Offering 120 Summary 121 Chapter 10: Forward-Looking Statements 122 Basis for Class Action Lawsuits 122 Private Securities Litigation Reform Act 123 Forward-Looking Statements 124 Legal Liability for Past Statements 127 Summary 127 Chapter 11: Providing Guidance 128 Whether to Provide Guidance 128 Form of Guidance Issued 130 Frequency and Timing of Guidance 132 Aggressiveness of Guidance 133 Guidance Policy 134 Summary 135 Chapter 12: Dealing with the Sell Side 136 Analyst’s Perspective 136 Finding the Right Analyst 139 Dealing with Analysts 140 Negative Analyst Report 144 Dealing with Brokers 145 Pump and Dump 147 Dealing with Investment Bankers 148 Dealing with Sell-Side Specialists 149 Summary 149 Chapter 13: Dealing with the Buy Side 151 Types of Investors 151 Dealing with Institutional Investors 153 Travel Requirements for Meetings with Institutional Investors 156 Dealing with Individual Investors 158 Dealing with Investment Clubs 160 Dealing with Foreign Investors 161 Investor Presentation 162 Managing a Private Investment in Public Equity 164 Accredited Investor 164 Dividend Reinvestment 165 Direct Stock Purchase Plans 165 Summary 166 Chapter 14: Dealing with Credit Rating Agencies 167 Credit Rating Agency Relationship 167 Summary 169 Chapter 15: Dealing with Short Sellers and Activist Investors 170 How Short Sellers Operate 170 How to Handle Short Sellers 172 Monitoring Short Sellers 174 Dealing with Activist Investors 174 Summary 175 Chapter 16: Dealing with the Board of Directors 177 IRO and the Board of Directors 177 Investor Relations Board Packet 182 Summary 182 Chapter 17: Major Stock Exchanges 183 Listing Process 183 American Stock Exchange 184 Overview of the NASDAQ 187 NASDAQ Capital Market 187 NASDAQ Global Market 188 New York Stock Exchange 190 Comparing the Stock Exchanges 191 Summary 193 Chapter 18: Monitoring the Market 194 Monitoring through Internet Services 194 Monitoring through Individuals 195 Surveying Investors 196 Locating Investors 199 Monitoring through a Stock Surveillance Service 200 Monitoring through a Stock Transfer Agent 201 Bloomberg Terminals 201 Electronic Message Boards 201 Activity Caused by Trading Strategies 202 Summary 204 Chapter 19: Blue Sky Laws 206 Blue Sky Law Requirements and Implications 206 Blue Sky Advice for the IRO 208 Chapter 20: Proxy Solicitations 209 Proxy Solicitation Concepts 209 Online Proxy Voting 215 Proxy Distribution Process 218 NYSE Rule 452 222 Summary 223 Chapter 21: Dividends and Stock Buy-Backs 224 Transition to a Dividend 224 Dividend Policy 225 Stock Buy-Back Alternative 227 SEC Conditions on Stock Buy-Backs 228 Disclosure of a Stock Buy-Back Program 229 Odd-Lot Shareholdings 231 Summary 232 Chapter 22: Outsourcing Investor Relations 233 Skill Set of an Investor Relations Consultant 233 Managing the Consultant Relationship 236 National Investor Relations Institute 237 Summary 237 Chapter 23: Investor Relations Metrics 239 Internal and Financial Metrics 239 Peer Metrics 244 Company-Specific Metrics 245 Metrics Consistency 246 Explaining Results 247 Summary 249 Index 250