Capital Markets / Investor Relations in Two Minutes or Less
A Data Center REIT NDR and Cerner
When a management team takes a meeting with an investor, the executive truly never knows what that investor wants until they actually meet.
An executive can always expect two types of questions from an investor:
1. The question that is actually asked
2. The question that is implied by the asked question
Remember, the investor already knows the answer to both the asked and implied question.
Are you able to provide the expected answer, or do you give the investor something out of left field?
Your answer will likely dictate the productivity of the meeting and how successful you think it went.
What Is a Non-Deal Road Show (NDR)?
A non-deal road show consists of a management team traveling to New York, Boston, San Francisco, Chicago, et al., and meeting with investors in his or her respective offices.
Typically, a management team spends a day in a given city and conducts several investor meetings over the course of the day.
What Is an Investor Meeting?
An investor meeting consists of the CEO and CFO, and some configuration of the executive team, meeting with an analyst or portfolio manager in their respective offices.
The portfolio manager and analyst will pepper the management team with a bunch of questions for about 45 minutes to an hour.
The investor needs to determine one of the following actions:
1. Buy the stock
2. Buy more of the stock
3. Stay put
4. Sell the position outright
Investor Meetings are about information exchange, which there are three types:
1. Your Company
2. Competitor(s)
3. Industry
The more thoughtful and nuance discussion you can provide across these three levels the more
1. Credibility given to management
2. Likely to invest
3. Likely to meet regularly
These three variables are what create strong investor relationships.
Data Center REIT and Cerner
My experience involved a Data Center REIT NDR in Chicago. Two items tipped me off that the meeting would likely be about something else:
1. Generalist hedge fund focused on technology and digital healthcare
2. HCIT sales specialist led the meeting
The sale specialist led the meeting toward Cerner half way through and the discussion went from there.
Interestingly, the analyst at the bank downgraded Cerner to sell shortly after and the stock went from $71.50 to $48.50.
Remember, an executive never knows what topic of piece of information will make that investor meeting a resounding success!
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