How to Engage with Investors in the Wake of Crisis
19 March 2020
By Vanessa Hartung
The impact of COVID-19 is quickly spreading across the globe, resulting in the closure of borders and cancellation of in-person events as social distancing is exercised. Meanwhile, drastic volatility in the world’s capital markets is causing concern for both businesses and investors. In times of uncertainty, being as transparent as possible and communicating with investors is paramount.
But what should be communicated? And how? Undoubtedly, there will be questions regarding how your company is managing the impact of COVID-19. So, what is the best way to respond? Karen Greene, VP of Client Experience at Q4, had the following advice based on her three decades of experience in investor relations:
- Communicate to your stakeholders the company’s stated goals and actions regarding the safety of your employees, partners, and customers. It is reassuring to all involved that the company is looking out for the welfare of its people by following social distancing protocols.
- Maintain your credibility by owning the uncertainty, and reassure investors that the company is highly focused on managing through it. Remember that everyone is in the same boat, and no one has answers at this point in time.
- Don’t offer up views on the impact to the business until the company is fully prepared to do so. Resist getting caught up in discussions on the impact of macro conditions on the business and the company’s outlook on financial performance. Simply convey that the company is intently focused on monitoring and assessing the situation and will share those assessments as soon as possible.
- Reinforce the long-term focus of the business. Investors who are aligned with your vision are likely to be with you for the long haul. So, maintain a voice of calm and reason with investors, highlighting the opportunity that lays ahead.
- This may even be the time to engage investors who don’t yet know your story and are now able to take a position. Reach out to select targets who are the right fit for your company with custom-tailored communications and materials.
With COVID-19 continuing to eliminate the opportunity for in-person interaction, meeting with investors is a challenge. Most IROs have already canceled their physical events to pursue alternative communication strategies. Even before it was categorized as a pandemic, Rivel Research found that 11% of companies had canceled their planned NDRs and 5% had canceled their investor day, though we expect those figures are significantly higher today.
- It is better to stay connected, even if you don’t have answers or updates right now, rather than to be unresponsive to your investors during these market conditions. In the coming days and weeks as you and your management teams are re-forecasting and modifying strategy and outlook, get on the phone. For the weeks and months that follow though, think about going virtual to get your story heard.
- Leverage your investor relations website and social media as a means of keeping investors and stakeholders up to date with the latest information. You can also share any digital events or conference calls that have been recorded on your website, along with any related materials, for easy viewing.
As the COVID-19 situation continues to evolve, companies are doing what they can to adjust accordingly and minimize any impact on investors and other stakeholders. Leveraging virtual events to maintain engagement with the investor community and bridge the communication gap. Learn more about conducting efficient investor meetings and providing maximum value through your investor relations website by attending our upcoming webinar, Making the Most of Your Digital IR Program During COVID-19.