As a small-cap fund manager I’m always on the hunt for new ideas. Typically
these ideas arise from quarterly earnings calls of companies in my area of
expertise.
But much to my surprise, new insights are increasingly coming from financial
content (transcripts, presentations etc.) found exclusively on corporate investor relations
websites.
In the past, I largely ignored IR websites. There was never much there. But
in this age of transparency, companies, especially small-caps, are posting more
and more substantive financial content there.
While this is a significant development for all investors it’s also
puzzling in one very important way.
While public companies are always looking to expand the reach of their investment
story and appeal to new investors, many do little with the vast, original
content sitting largely undetected on their corporate IR websites. These sites
typically attract little investor traffic – even as investors search vigorously
for new stock investment opportunities elsewhere on the web.
I was reminded of this during a conversation last week with a top exec at a
small-cap company I’m invested in.
After questioning the exec about his business I asked about the company’s
plans to spread their message and attract new investors. The company has a
powerful investment story that no one is paying attention to -- even as significant
catalysts are on the horizon.
The small-cap exec told me that at present he’s only employing what would
be considered traditional IR strategies. Unfortunately, none has proved terribly
effective in moving his stock price higher.
What about online IR strategies? With so many investment analysis sites on
the web (i.e. TheStreet), targeted opportunities to reach investors at scale
should be readily available.
But, according to the small-cap exec, while no third-party investment site is
being utilized for IR outreach purposes he was open to suggestions -- especially
for disseminating the fantastic PPT presentation sitting on his IR website.
The Power of
Content
The marriage of corporate IR website content and third-party investment
analysis sites (i.e. TheStreet) is a remarkable match that benefits all
involved: Public companies have unique content
they want to share with investors everywhere and investors are looking for
unique content to help them make investment decisions.
From investor presentations to annual meeting Q&A transcripts (and
beyond), the financial content I’ve been finding on IR websites is substantive
and actionable. Yet, investment analysis sites that should be begging to host
that content are largely nowhere to be found. At the same time, these
investment analysis sites are suffering as the quality of their content
diminishes and traffic has largely plateaued. They’re desperate for the high-quality,
original content needed to maximize pageviews and ad revenue.
If I were in the IR business, I would do anything to spread IR site content
online – even if it meant paying a third-party investment analysis site to host
it. That way, I could target investors exactly where they spend their time
searching for new opportunities. I can’t imagine a better platform to identify
prospective investors.
And, when you think about it, this sort of IR site content is ideally
suited for investor relations marketing efforts across the web. It’s content
that enhances the user experience on third party investment analysis sites by
providing unique information investors desire.
Conclusion
IR pros are in an enviable position. They control substantial amounts of valuable
original and actionable financial content on their IR websites. Bringing
attention to that content by making it available on third-party investment
analysis sites would go a long way toward expanding the reach of their message
and exposing their investment merits to new investors.
Aside from Stocktwits, no investment analysis site has made a concerted
effort to pursue IR pros and their treasure chest of financial content. Nonetheless,
the investment sites all desperately want it. Because for ad-supported
investment sites faced with slowing traffic and stiff competition there’s
nothing better than original, actionable content.
IR pros have it, they’re incented to share it, and no doubt investors
everywhere would benefit if they did.
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