Key Strategies to Keep in Mind when Dealing with Investors
With stock indexes fluctuating as much as Wisconsin snow levels this month, many investors are reviewing their portfolios with an increased sense of apprehension and a growing list of inquiries. Consequently, it is important for company executives to maintain consistent messaging when addressing investors and their questions. A recent Thomson Rueters online article summarized these key strategies for dealing with investors:
1. Prepare and review the key issues with your management
team. What issues are likely to be asked by investors?
Ask yourself the difficult questions and prepare effective
answers.
2. Comply with Reg FD. Review the answers you've
prepared. Do they violate Reg FD?
3. Role play - research, prepare and practice how best to
answer questions either in front of a mirror or have your
team videotape your comments. Sometimes inflection
and physical mannerisms are a "tell" for investors looking
for any insight/edge.
4. When meeting with investors, try to maintain your tone
and composure. Many investors complain that executives
become arrogant or abusive when faced with difficult
questions.
5. If pressed to answer a question which you don't have the
answer to, or if answered, would reveal material non-public
information, work to craft an appropriate response before
the meeting.
6. Don't give mixed messages to investors. Saying different
things to different investors will only serve to help create
confusion, ruin your reputation and could potentially lead
to that investor selling his shares or choosing not to invest
in your firm.
7. Quality of management team is a key factor for many
investors (especially value investors) when making a
decision to buy or sell shares. Maintain your integrity and
stay true to your prepared commentary.
8. Don't lose sight of your focus. At the end of the day,
hopefully you enjoy your role in the company. Don't
forget that joy and optimism when dealing with investors
because it can be infectious.