Q4 Platform success stories.
Coming off of a tough 2022, the capital markets surprised in H1 2023.
The first half of the year saw the S&P 500 gain 15.9% (its best H1 since 2019), the Nasdaq surged at 31.7% (its best first half since 1983), and the IPO market started to thaw.
Despite this initially strong performance, markets started to show weakness in late Q3, and many of our clients remain challenged, standing out in investors’ minds.
These challenges were exemplified by the stark performance divergences between market cap and equal weighted indices in H1. There has, and continues to be, an overwhelmingly strong concentration of interest around the market’s biggest and most well known names. The S&P 500’s strong showing in H1 2023 was not matched by its equal weighted counterpart, which returned only 6%. If one stripped out the top 10 stocks in the index, the other 490 would only have gained 4%.
No one can predict where the market and investor attention will shift next, but this hyper concentration of focus and attention being paid to the most well known companies is something we at Q4 are on a mission to help change with the Q4 Platform.
In markets like these, we’ve seen how connecting with the right investors, finding new analyst coverage, showing the value of your IR efforts, and staying vigilant around activism continue to be top of mind across our client base.
As we move into the back half of 2023, which may prove more challenging than H1, we wanted to share some client stories which exemplify how the Q4 Platform, Engagement Analytics, and Surveillance offerings have been helping our clients win in the capital markets.
Finding new investors and sell-side analysts.
As more time, attention, and capital crowd around a shrinking set of larger issuers, those who don’t fit within those categories may have a hard time getting noticed.
Over the last year, three of our clients have been focused on these specific IR efforts. After being tasked with expanding the number of portfolio managers their management team spoke with on a recurring basis, as well as analysts who covered their stock, our clients were in need of a smarter, faster, and more informed way to go about finding these individuals.
Q4’s team of expert Surveillance Analysts and IR Advisory Professionals stepped in, leveraging unique insights across Engagement Analytics and Q4 Desktop to identify strong sell-side analysts and portfolio managers that were previously not on their IR radar, despite them actively following the company’s investor emails and attending events.
Following these discoveries by the Q4 team, our clients were able to proactively reach out to these new potential contacts with confidence, knowing the analysts and portfolio managers they were trying to connect with were already interested in the company’s story. As a result, each of these clients were able to start building relationships with a new set of potential investors and analysts, which were a key goal of their respective IR programs.
Staying ahead of activists.
With the continued rise of investor activism relative to last year, several of our clients have been relying on our Surveillance experts to keep them informed and connected to what is happening in the markets, with their stock, and what to do about it. For one of our clients, these concerns were significant.
Since re-entering the public markets a few years ago, a major hedge fund had entered their company’s stock, and management was worried a similar fund with an activist leaning would follow to target the board.
Given the concern, Q4’s Surveillance analysts began proactively monitoring the company’s DTC trading flows and using Engagement Analytics to monitor their website and IR email recipients.
Shortly after beginning, the Q4 team noticed abnormal share flows into custodians with a history of work with hedge funds, paired with a prominent activist spending a significant amount of time on the company’s website related to one of their board members.
It was clear the activist was researching the board member while potentially buying shares of the company’s stock. Alarmed by the activity, Q4 immediately alerted the client, suggesting a few items of action to consider. While a specific campaign or disclosure of ownership had not been filed since the incident, the company’s IRO and management team were appreciative of the insight and left feeling more confident that Q4 was on the lookout to ensure they were ready.
Evaluating IR program impact.
A consistent theme of 2023 has been a tightening of IR budgets. Despite this reset on resources, expectations on investor relations teams remain high.
To help show the ROI of IR investments, many of our clients have been turning to Engagement Analytics powered by the Q4 Platform. The connected capabilities of the Q4 Platform enable our clients to validate if their targeting efforts are resulting in key investor prospects displaying interest by showing up at their earnings events, signing up for investor content, or visiting their website.
Specifically, one of our nano cap issuers clients had been using these detailed analytics to analyze how overall interest and awareness of her company’s investment narrative is growing throughout the earnings cycle. By comparing changes in the number of capital markets participants visiting their website, subscribing to content, downloading key materials, and attending events, she’s been able to get directional validation if investor awareness is increasing and if messaging is working.
This has been particularly useful for her as she’s been investing heavily in investor marketing and revamping her external IR presence. Until now, this depth of intelligence had not been available. Legacy behavioral analytics products, like Google Analytics, have historically had a narrow focus on understanding web traffic and haven’t focused on the whole picture.
For more on how Q4 is helping our clients be faster, smarter, more informed and connected in the capital markets, see here for a short discussion with Q4’s Senior Director of Investor Relations, who was just named one of NIRI’s top 40 under 40, Jamie Stanton.
