Rebuilding Credibility
Leveraging a performance turnaround to rebuild credibility
A small-cap company suffered a reversal of fortune on Wall Street. The company refocused its strategy, hired a new CFO and began reporting stronger results. But the stock price continued to languish until management launched an aggressive investor relations program.
Client Challenge
Rebuild credibility with institutional investors and sell-side analysts
A combination of strategic errors, poor financial performance and an SEC investigation resulted in a loss of credibility for management and an extended decline in market valuation for a small-cap security company. Recognizing the severity of its problems, the company refocused its strategy, hired a new CFO and began to report stronger quarterly results. Investors, however, did not recognize the turnaround, and the stock price continued to languish at historic lows.
Sharon Merrill Approach
Aggressive outreach to buy- and sell-side investment firms
Sharon Merrill’s work with management started with aggressive outreach to the buy- and sell-side firms that owned or followed the company, including a series of meetings with these constituents. Turning to prospective institutional investors and sell-side analysts, Sharon Merrill conducted a STREETSCOPE® perception survey that provided insight into how these audiences perceived the company and its management team. Messaging reflecting the survey findings was delivered as the company announced its quarterly results and in subsequent meetings.
Results
Enhanced management credibility and improved valuation
Sell-side analysts’ research notes reflected enhanced management credibility. The company’s institutional stock ownership rose from 110 to more than 170 firms, while the number of shares controlled by these institutions climbed from 42 million to more than 50 million. Sell-side ratings improved, and the company attracted new two analysts. Valuation improved, as well, with the stock price rising more than 500% from the all-time low posted just prior to Sharon Merrill’s engagement.
We combine aggressive outreach with finely tuned messaging to boost management credibility and enhance valuation. Call Sharon Merrill at 617-542-5300 or email us at info@InvestorRelations.com.