Sunday, February 5, 2012

Small Cap/Microcap Investor Relations - The PR Solution

Small Cap/Microcap Investor Relations - the PR Solution

By Ned Barnett, APR
PR/Marketing Fellow, American Hospital Association
Adjunct Professor, UNLV & MTSU
Author, Finances for Non-Financial Marketing

It is no big challenge for Fortune 500 companies to manage investor relations. With so much as stake, they can afford high-salaried professional staffs who manage investor communications and massage investor expectations. This is big business, and they do it very well indeed.

However, this is NOT equally true for Small Cap and Microcap public companies. They have to play by the same SEC rules, they have to deal with equally-demanding investors - but they cannot afford to undertake and support major, ongoing high-ticket investor relations programs. Worse, because of their size, many "investor" publications - Fortune, Forbes, BusinessWeek, the Wall Street Journal - choose not to cover them. They're too small to attract the big media's interest.

This is a significant problem for Small Cap and Microcap investor owned firms, but it doesn't have to be. There is a solution - a sophisticated, integrated PR solution, one that won't break the bank but will get the job done - to this kind of investor relations challenge. In more than 25 years of working with investor-owned public companies, we have refined our PR approach so that today, we have found what works. Even more important, it is an approach that is easily adapted for a wide variety of public companies. We've put it to work for healthcare companies, high-tech "Silicon Valley" companies, intellectual property companies and a range of other public companies - and with careful adaptation to individual companies' needs, we know that it works, and keeps on working.

Strategic elements of this campaign include the following components. However, before you begin considering them, please note - the "Do Not Do This At Home" warning applies. If you do not intimately understand the nuances of a PR approach to Investor Relations, attempting to use this template as YOUR plan can lead to disaster. However, if you do understand how to make PR work in an investor community - if you really understand the SEC and it's Fair-Disclosure regs - if you know how to work with the media (and get them working for you), then this template will save you a great deal of effort.

You need to put out valid, legitimate, newsworthy press releases on a regular and aggressive schedule - ideally every week, but certainly no less than every two weeks. You can't pad the list of releases with BS no-news news releases - that invites a kind of disaster you can better live without. And you can't expect - or create the expectation - that a significant number of these releases will be picked up by the traditional media. But with the proper emphasis, along with the proper wire service distribution strategy, a regular drumbeat of press releases will work for you.

Off-Broadway: You remember the old joke: "Where does a Broadway Show open?" "Off Broadway." That's the essence of this strategy. Instead of shooting (at least initially) at out-of-reach "Marquee Media" - the big names that seldom cover Small Cap and Microcap companies - go for smaller niche-market media who are hungry for news that nobody else has covered ... yet. Identifying these - and courting them - is a fine art, but the results can be all out of proportion to the effort.

Like Hansel and Gretel, you want to leave breadcrumbs on your trip through the dark and forbidding forest of Investor Relations. However, these breadcrumbs are not intended to lead you home - they are intended to lead media members and potential investors to you. You do this through a strategic, systematic selection of topics for your drumbeat of press releases - with those, you are creating a "story" that, when a reporter or an investor "puts it together for himself" by finding it via Google or some other search system, makes your case for them. Because they've found this information themselves, they are more inclined to believe it. When it comes to Small Cap and Microcap Investor Relations, remember: "Credibility is King" ... and nothing creates credibility like favorable press coverage (or what appears to be favorable press coverage).

Open Kimono: Investors and reporters both look for - and appreciate - apparent candor from C-level Execs at Small Cap and Microcap companies. Yet most corporate C-level execs are rightly concerned about being too open - when done right, business is aggressively competitive, and only a fool will think that competitors aren't listening. There is a way - an effective way - of creating the appearance of open-kimono candor without giving away the ranch. The Internet can be a great help - or it can be your corporate downfall. Knowing how to handle blogs, and webcasts, and bulletin boards is critical to success - but once you master those skills, and once you commit the time to managing those tools, "open kimono" can be a decisively-effective strategy.

One Size Fits All ... NOT! There is a temptation among smaller companies - those concerned with operational costs as well as with success - to look for a low-cost one-size-fits-all solution to their IR problems and opportunities. But Lowest Common Denominator can only meet the lowest-level of needs, and with low-levels of results. However, with refinements specific to an individual company's needs, resources and opportunities, a template such as this can be made to work - often with dramatically-positive results - to transform a Small Cap or Microcap's investor relations program.

Social Networking All of the above should be carefully integrated into, and supported by a sophisticated "2.0." version of social networking - making use of YouTube videos, Blogs, White Papers and Case Studies which put out the information about the Small Cap/Microcap's news in differing formats for different audiences, all further supported by a controlled series of Facebook posts, Twitter tweets and LinkedIn messages. In addition, social networking efforts can help to turn investors and potential investors into an "affinity group" that will support your efforts at investor relations.

The bottom line is this: Help and support the stock price to move to where an aware market rationally decides it ought to be. IR cannot improperly move stock prices - rightly so - but a solid program can help a stock assume its appropriate market position ... and it can do so in a cost-effective way that makes your IR program a valuable investment, rather than a burdensome overhead cost.

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