IR Is Not a One Size Fits All Endeavor
A large amount of public company advice is presented from a Fortune 500 lens.
The major problem revolves around that a Fortune 500 approach fits all companies.
The crux of the problem is that smaller cap companies destroy shareholder value when said companies take a more passive approach to investor engagement.
Larger public companies benefit from an important luxury of indexing and liquidity. As market cap increases so does trading liquidity, possible position size, and investor interest.
A large or mega cap stock in an index can drive investor engagement with minimal effort or information.
Just being a member of an index forces certain investors to own your stock no matter what.
On the other hand, as market cap decreases so does trading liquidity, possible position size, and investor interest.
The primary problem of smaller cap companies is simply how do I get investors to care about my stock?
The solution revolves around maximizing effort, communication, and professionalizing your investor materials.
Smaller cap companies must take a professional approach to their earnings release, earnings script, and investor deck.
A significant amount of time and effort is required to identify the right narrative, call out the key data points for investors, and frame the story in appropriate ways through third party data sets.
Furthermore, the smaller the market cap, the greater focus and importance on the balance sheet, cash burn, and setting and reporting on the right metrics.
Smaller cap companies must go significantly deeper on explaining the underlying business in order to drive and sustain investor engagement.
REMEMBER: Investors need to hear it 3x or 4x times before they recognize, understand, agree, or believe the topic, data point, or narrative!
Wishing you an epic Friday!
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