What is Investor Relations?

written by Joe Diaz

Investor relations is a proactive process by which publicly traded company management teams’ interface with existing and potential new investors on a consistent basis, not just on quarterly financial reporting events.

The purpose of IR is to initiate and maintain dialogue with investors to keep them updated on the progress taking place at the company. There are thousands of publicly traded companies competing for the attention of a slice of the investment community. If a company does not engage with “the Street” on a consistent basis, that company is essentially “out of sight” and consequently “out of mind” – i.e., undiscovered and undervalued.

An important expectation of a CEO is that their company – Fortune 500 or micro-cap – capture the attention of a portion of the national investment community that is aware of the potential value of their company. That’s one of the reasons they were hired by the company’s board of directors. Not driving shareholder value is one the leading reasons for CEO turnover.

How does a CEO capture the attention of the national investment community? Articulating the strategic business plan of the company and providing insight as to how management is going to execute on that strategy. Creating a “story” that is believable and achievable. Over the years investors have heard all of the amazing stories of how companies and their respective technologies, products, and services are going to revolutionize the way we work, play and live our lives; strike one. Beware “hockey stick” projections; strike two. The slope is now extremely slippery. Very few of those have come to fruition. Investors are searching for themes and companies that can sustainably grow and become profitable in a reasonable time frame.

Messaging to the investment community should focus on how the company continues to develop and mature and how it is going to consistently gain market share; and how that will translate into market cap value. While it’s great that a company has leading-edge technologies, products or services, investors want to know how the company is going to take that leading-edge and turn it into sales. Investors generally care far more about execution than they do about technology. The technology means nothing if is cannot be converted into a consistently growing business.

What institutional investors are actually buying is the ability of the management team to execute on the business plan. They are looking to develop trust in the CEO and the CFO that when they say something, more than likely, it is going to happen. They are also looking for management to openly and honestly confront issues or financial results that do not meet expectations. They understand there is a natural ebb and flow to business – some seasonal, some unexpected, and some internally induced – even smart people make stupid mistakes. The important thing is that management explains the issue on a timely basis, how they are going to deal with it and what the metrics or milestones are that investors can follow to determine whether the company is gaining traction in alleviating the problem. That’s credibility, and in addition to execution, that’s what long-term investors are looking for.

As it relates to the tools IR provides – press releases, slide deck, quarterly conference call scripts and transcripts, SEC filings, investment conference participations, etc. – they should all reinforce the strategy, how that strategy is being executed, and the market acceptance of the company’s products. While the technology is important, the execution of the strategy is even more important.

Consistent outreach needs to be the focus for a small-cap company to attract a large enough investor audience that will drive the value of its stock as management executes on its strategic business plan.

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Jack has more than 20 years of experience in investor relations, FP&A as well as equity research roles at Wall Street firms. He provides clients with investor relations counsel and strategy, as well as support for quarterly earnings and investor and analyst targeting programs. Previously, Jack was a senior vice president in the corporate communications practice at Finn Partners and an executive at a large cap publicly traded retail company.

Roger Weiss is a highly regarded member of the Wall Street institutional sales community. In a career spanning more than 30 years, he has held senior sales management positions at leading sell-side firms including B. Riley/National Securities, Canaccord Genuity, A.G. Edwards, and First Manhattan Co. He also has extensive commercial banking experience serving at J.P. Morgan Chase (Manufacturers Hanover Trust) and PNC Financial. Roger holds a Bachelor of Arts degree from Vanderbilt University and an MBA, with concentrations in Accounting and Finance from the Columbia Business School.

Ben Shamsian has been an equities analyst on the buyside and sell side for over thirteen years. Prior to joining Lytham, Ben was a senior analyst at FNY Capital, Sterne Agee and Iridian Asset Management, where he covered consumer, industrial, technology, energy, and business services sectors. Ben has expertise in uncovering the value of equities through financial modeling, management interviews, and industry research. Throughout his career, many management and investor relations teams have seeked Ben’s advice as to how to better communicate with their investors. Ben began his career in accounting with PWC and Merrill Lynch, and obtained his CPA license. Ben holds a BS in Accounting from Yeshiva University and an MBA in Finance from New York University’s Stern School of Business.

Adam Lowensteiner has been closely involved with micro and small-cap companies his entire career. Prior to joining Lytham, Adam was a Senior Account Executive at Wolfe Axelrod Weinberger Associates, an investor relations agency based in New York City. For thirteen years Adam worked intimately with the CEOs and CFOs of emerging growth companies seeking to expand the investor audience base. Prior to working at Wolfe Axelrod Weinberger, Adam worked as a sellside analyst with CJS Securities in White Plains, New York, as a generalist, but focused on small cap stocks. Prior to CJS, Adam worked several years with Individual Investor Group in New York City as a Senior Research Analyst, mostly researching micro and small cap ideas for the company’s various publications and investment vehicles. Adam graduated from the Sy Syms School of Business at Yeshiva University with a Bachelors of Science in Finance.

Rolf has worked in the investor relations field for more than 15 years.  He is responsible for gathering research materials and assisting in the organization of materials for road shows and 1×1 meetings.  His focus is on researching and data analysis at the institutional level.  Prior to that, he worked with international commerce.  He holds degrees from the University of Iowa.

Brittany is a creative and resourceful marketing professional with 10 years of design, social media management and special event experience. She specializes in creating processes for heightened customer journeys through strategic and imaginative print and digital campaigns as well as creating and maintaining strong brands within the organizations she works for. Brittany has worked in a variety of industries in both the public and private sectors including Hospitality & Tourism, Education and Renewable Energy.

Kristen oversees creative programs and design concepts and plays an essential role in the marketing, communications and creative needs of our organization and client companies. For more than 15 years she has been applying her creative talents to developing collateral materials, annual report concepts and design, website design and development, social media and email marketing campaigns, digital and traditional print advertising. Additionally, Kristen manages all aspects of client press release distribution and quarterly earnings event logistics. She has a B.A. degree in English from Marist College and studied Computer Graphic Design at Phoenix College.

Robert Breza’s background includes 30 years of finance and technology experience including 19 years on Wall Street with Tier 1 firms such as the Royal Bank of Canada (RBC) for 10 years and technology focused firms such as Thomas Weisel Partners during the Internet boom and bust in San Francisco and Stern Agee. Rob has worked with large companies such as Microsoft and Oracle and many smaller companies taking 16 companies public (IPO’s). Rob has an MBA from the University of Minnesota – Carlson School of Management and a B.S. in Accounting from St. Cloud State University – Herberger School of Business. Rob resides in Scottsdale, AZ.

In a career spanning more than 25 years Joe Diaz has extensive experience in advising and counseling corporate management teams on operational and valuation issues. He has been instrumental in crafting and executing strategic programs that have yielded significant enhancement of shareholder value –including AdvancePCS (now Caremark Rx, Inc.), Allied Waste, Inc. (NYSE: AW), Bio-Rad Laboratories (AMEX: BIO), CNS, Inc. (NASDAQ: CNXS) and Abaxis, Inc. (NASDAQ: ABAX), among others. With a background in portfolio management Joe maintains a strong belief that investors in the small cap arena are actually “investing” in management teams than can consistently grow businesses, rather than innovative products and services. His primary focus is on establishing and maintaining management credibility. An alumnus of Coe College, Joe, along with his wife Pat, is an avid equestrian, sports fan and free market capitalist.

Joe has a strong track record for the management, design and implementation of strategic plans to enhance shareholder value for leading-edge companies. In a career that spans more than 25 years, he has successfully delivered strategic investor relations services to clients and provides unique insight on quarterly earnings materials, investor conferences, non-deal roadshows, IPOs, and analyst-investor days. Leveraging his extensive knowledge of industry fundamentals and his direct experience with investor decision-making, he has been responsible for overseeing significant capital appreciation for client companies under his direct management. He was previously affiliated with a leading regional investment banking and securities firm and was responsible for initiating and operating the first United Mexican States Federal Treasury Certificate (CETES) desk in Arizona. Joe holds a B.A. degree from Arizona State University.

Robert is a 20-year investor relations industry veteran, with an expertise in understanding the dynamics and requirements of a successful relationship between public companies and the capital markets. During his career, Robert has overseen the development and implementation of every critical component of a successful investor relations campaign, including the execution of thousands of non-deal roadshow meetings, conference 1×1’s and management conference calls as well as other critical investor outreach components such as creation of the firm’s institutional corporate profiles and virtual conference initiatives. His ability to successfully guide his clients corporate positioning resides in his ability to articulate a company’s value proposition through benchmarks and metrics that easily resonate with the national investment community, streamlining these components throughout press releases, conference call scripts, investor presentations, websites, and annual reports. In addition to traditional investor relations activities, Robert has consulted the management and board of directors on a number of capital markets activities, including having guided numerous companies through the uplisting process from the OTC to Nasdaq and/or NYSE, cross listing of shares from a foreign exchange to the U.S., proxy contest situations, capital raise evaluation, merger/acquisition valuation impact, crisis communications, perception analysis, and board of director/management recruitment. Robert spearheaded the campaign and created the relationships that resulted in a client being named “Stock of the Decade” as the #1 performing stock for 2000-2010. An alumnus of Arizona State University, he holds a B.A. degree in Finance.

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