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Lost corporate and management credibility
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Declining market value
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Reduced trading liquidity
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Damaged business reputation + customer & vendor concerns
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Negative media & social media attention
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Market delisting
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Increasing vulnerability to activists or hostile suitors
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Reduced access to capital + increasingly negative terms.
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Narrowing share ownership
Visibility + Credibility.
One without the other will get you nowhere.
Your small-cap stock is in fact a product. A product with a brand and a promise of future performance, not unlike a new car.
The questions are; is your message credible – and is your message visible?
And what perceptions or word of mouth have you established?
Can I count on this company to do what it says it will do?
What are they showing me that earns both my attention and my trust?
As consumers, when we set out to buy a new vehicle, our research begins with our needs and objectives. From there we winnow our choices based on very personal standards for reliability, aesthetics, performance and of course our budget. Other subtle and more emotional elements also enter the decision framework; brand reputation, auto reviews, reliability and opinions from friends or colleagues.
Typically, a ‘short list’ of factors emerges – ranking our investment options by price point, features and performance characteristics.
If the automaker has done it’s job, they’ve created awareness and enough enthusiasm & credibility to justify a visit to the showroom. And finally, if the product meets our test drive due diligence, we’ll pull the trigger on the investment.
Stocks are selected in the very same way. For small-caps, an unclear story, brand or value proposition will make the difference between a new investment and “no thanks.” It’s also hard to invest in a stock you’ve never heard of!
But this is the exact position in which many small-caps find themselves. They are off the radar – without proactive targeting and outreach – and even when discovered, their messages are neither clear nor credible or too reliant on SEC filings that provide a very limited view of the full investment scope. Further, there’s no strategy for follow through or proactive engagement to gain mind share and stay there.
Appropriate IR outreach and messaging is a full time job, but unlike the automaker analogy – public companies can’t spend hundreds of millions on sophisticated promotion.
That’s where Catalyst IR comes in – we bring the experience, the methods and the ongoing follow up that creates exposure and fosters understanding and credibility. We let our clients focus more on building their business – while help them build their Wall Street audience.
The Result?
Investor Interest, Confidence & Engagement.
Case Study:
MARVEL ENTERTAINMENT
Retained as IR counsel in January 2000, after Marvel’s exit from bankruptcy
Situation:
- Marvel characters acquired out of bankruptcy by a toy company
- Cap Structure: $145M market cap + $250M Preferred stock + $200M high yield debt
- Business was largely toys, along with licensing and publishing – no films
- Wall Street had forgotten Marvel after 4 years of bankruptcy proceedings
- Marvel retooled itself: outsourced toy operations, focused on licensing, refreshed characters and grew comic publishing, benefited from licensed film productions and ultimately secured non-recourse funding to initiate its own productions
Program/Results:
Served Marvel 10 years as outside IR counsel.
- Strategic counsel on rebuilding awareness, building awareness outside toy sector, balance sheet enhancements and array of issues
- Reinitiated sell-side & buy-side outreach – focusing on leisure, consumer, media & entertainment investors
- Shaped Street perceptions of evolving Marvel; secured increasing transparency and management access to support Wall Street interest
- Developed focus/respect on impressive & unique operating discipline & cost consciousness
- Led several crisis management situations around deals, litigation, product liability, etc.
- Built base of 17 covering Sell-Side analysts
Ultimately Marvel profile attracted acquisition by Walt Disney in Aug. 2009; deal closed Dec. 2009 at $4.4B equity valuation.
(Above: Marvel share price chart. Catalyst IR began counsel in 2000.)
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What is the Shortlist?
Catalyst will research and identify a universe of sell-side analyst targets as well as institutional and/or high net worth investors, that are appropriate current or future targets for your company. This research is based on our proprietary investor database as well as “Big Dough” BD Corporate and other sources.
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A Limited Engagement & High Value Deliverable.