This is Not Your Father’s Stock Market

We’ve been talking a lot about how the challenges of our public-company clients are going to change on the other side of the recession.  Obviously, the equity marketplace will be different than it was. 

The investment banking industry has been decimated, and I’ve seen estimates that the number of senior sell-side analysts has been cut by as much as half.  It seems like old news, and in some ways we’ve digested it and moved on.  Institutional investors are already relying more and more on other sources of information and analysis and that will probably accelerate. (See Demise of Sell-side Research.)

What we haven’t seen yet is what happens when money flows back into equities – especially to companies that have relied on the sell-side to help market their stock.  Especially to lesser-known companies that are going to have even more trouble attracting research coverage and Wall Street attention.  Especially when they are courting investors – in a value-laden environment – whose appetite for risk and uncertainty have been hammered along with their portfolios.

My colleague Rob Berick has started writing about what’s going to happen and what companies can do to attract investors .  He suggests that the evolution of the most effective IR programs will include: a clearly articulated argument as to why their company is in the best position to take advantage of the economic recovery; greater focus on an online strategy that recognizes that investors and analysts increasingly turn to the web for information; and revitalized targeting efforts that embrace existing investors and aggressively pursue new investors through channels that don’t rely on the sell-side. 

In times of traumatic change, people always find new and better ways of doing things.  No doubt the investor relations profession will, too.  We’re clear on what some of the best strategies will include but we’re always looking for ideas.  What do you think the picture will be on the other side of recovery and how should companies change their approach to IR to succeed?  Let us know. 

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