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Group 1: Investor relations
Transcript of Group 1: Investor relations
What is it? History 1. 1. The advent of XBRL
· eXtensible Business Reporting Language
· Will we even need financial analysts in the future?
· investors should be able to read the output for themselves
2. Evolution of investor relations on the Internet
· Conference calls
· social networks
· GET THE WORD OUT
· Never went away
· increasing amount of shareholders from all over the world
“A strategic responsibility that integrates finance, communication, marketing and securities law compliance to enable the most effective two-way communication between a company, the financial community, and other constituencies, which ultimately contributes to a company’s securities achieving fair evaluation.” -The National Investor Relations Institute
• Every investor relations specialist has one basic responsibility “to be the communications link between the company, the financial community and the present and potential stockholders”
-Author Herbert Halbrect
• Establish credibility
• Help the company to match its shareholders mix with its general programs
• Know in detail how the company makes money
• Build up and distribute background material on all aspects of the company that might be of interest to investors and market professionals
• Provide feedback to management as well as inform management of the changing SEC requirements
• Provide accurate and timely information in a non technical language that the general public will understand
• Report to management on conditions and trends that can affect company securities What does it involve What do Practitioners do?
• Communication with investors and publics on a company’s financial standings.
• Lies on the border of both communications and finance.
• Among the highest paid professionals in the PR field
• Obtain large amount of information and take on many responsibilities
• Highly respected
• Must avoid many things
• A lot of responsibilities and pressure for those who cannot handle it
• Company’s credibility relies on that person
• They are the main communication link for the financial standings of the company Advantages to working in investor relations Disadvantages to working in investor relations Highest paid specialization of PR
Median salary for practitioners specializing in “financial/IR” was $165,620
$41,212 - $76,000 Salaries Future Projection
-Quiet campaign in 2003
- Initial Public Offering (IPO)- a company’s first offering of stock to the investment community
- Company values
: slow, unsteady market
- 2003 other company’s withdraw
-BWW’s confidence impresses securities analysts
-Goals of BWW’s IPO campaign:
--raise $43-$45 million
--Eliminate $10million debt
--Increase number of restaurants
-sell 2.7million shares at approximately $16 apiece
-Straightforward news release
-Research shows positive response of investors
-Increase price from $16 to $17 per stock
-Easier access to investor info
-Declined to speak on launch day
-$51 million total generated
-$17 increased 35% to $22.95 in one day
-Increased to $26 in one month
-Quarterly profits increase 37% from previous year
-Increased investor relations communications
---- Beginnings Problem Goals Process Results Case Study investor Relations and Us!
Lack of Interest (boring)
Would only do it for the income
Too much pressure
Mathmatic skills not up to par
-The First sighs of Investor Relations
Stora Kopparberg mining company
Dutch East India Company
Boston Manufacturing Company
-The Development of Investor Relations in the U.S.
Post World War II
“Buffalo Wild Wings Ins. Today announced that it has filed a registration statement with the Securities and Exchange Commission for an initial public offering of common stock” “Buffallo Wild Wings Inc. (Nasdaq: BWLD), which owns and operates or franchises 227 Buffalo Wild Wings ™ restaurants in 28 states, today announced its public offering of 3,000,000 shares of Common Stock at a price of $17.00 per share” “Certain statements in this release… are forward –looking statements that involve risks and uncertainties… Investors should take such risks into account when making investment decisions.” “Our Mission is to WOW people every day”
“We are GUEST-DRIVEN…We are TEAM FOCUSED… We are COMMUNITY-CONNECTED…”
“We are DEDICATED to excellence: We will WOW our franchisees and stakeholders with outstanding, industry-leading financial results and operational performance.” -The Three Eras Financial era (1970-2000)
-the shift from private shareholders to professional investors, and more attention from their company
-focused on providing financial disclosure to investors
-the focus from mass media changed to one-on-one meetings with institutional shareholders and financial analysts. Synergy era
-refocused their goal towards working on the understanding of the company among investors, its value, and providing both positive and negative information
-the communication is two-way with information traveling from the corporations to investors and back from investors to the corporation.
-feedback is analyzed at the highest level of the organizational hierarchy
Communication era (1945-1970)
-not well established
-period lacked strategic and managerial activities, and the communication of information was only one-way. Set up informational sessions SEC approves, Launching news release
Communication with publics
¬Overall comparisons show that both are a management function that is used to communicate to specific publics. However each branch of public relations has different publics and is used by management in different ways. Investor relations is used in top management in order to communicate the financial information from a company to all parties inte¬rested in the information. This includes the media, the public, and the company itself. Through the use of mass media as well as internal communication investor relations has become an important part of companies around the world. Investor relation is used in top management in order to communicate the financial information from a company to all parties inte¬rested in the information. They are responsible for making ethically sound financial statements for a company.This includes:MediaThe publicThe company itselfIt is important for investor relation’s practitioners to be able to communicate complex information to the public in a way that the general public is able to make sound financial decisions with little confusion.Through the use of mass media as well as internal communication investor relations has become an important part of companies around the world.The field of investor relations holds a lot at stake for investors and the company as well as financial analysts, stock exchange firms, brokers, dealers, commercial banks, financial media, and the list continues. Similar activities include: The practitioners while responsible for things common to public relations such as newsletters, internal communication being a key function of this field, also are responsible for making ethically sound financial statements for a company.
This field requires in depth knowledge of:
Finance including the stock market and financial reporting
Specific industry knowledge of the company is in
Knowledge of the law