Investor Relations

16INVESTOR RELATIONSBeginning of theaftermarket1st earningsannouncement1st Annualgeneral meetingof shareholdersMeeting regulatory reporting and disclosure requirementsExhaustive share ownership identification, broken down bycategory of investor and by region“Feedback” from the roadshowFirst consensus of earnings estimates published by sellsideanalysts, including their investmentrecommendation and target priceInvestor Relations strategy developmentAnnual report writing, design and productionInvestor Relations program to the retail shareholdersBuild in-house or outsource Investor Relations functionPhase 1 Phase 2 Phase 3 Phase 4Figure 1.6 Beginning of the Aftermarket (Phase 3)and, so to speak, “on its own.” Here are a few essentials to get off to agood start and set up the right tools to manage a winning Investor Relationsprogram: The exact breakdown of the shareholder base, both in terms ofcategories and geographic location. The banks that have placed shareswith their clients will be required to provide the most accurate informationpossible. If this information is used to build the company’s contactdatabase, an absolute prerequisite for any Investor Relations program, itneeds to include all relevant information about the institutional investorsthat established positions and the number of shares acquired in the IPO.Regrettably, new issuers often find themselves with no more than a list offinancial institutions, with no addresses or individual names. The only solutionin this case is to enter the information from the business cards collectedduring the road show into the computer to create a database, far enoughahead of the next press releases to be sent out. Feedback from road shows. While the subscription rate and trendin the share price in the first few days of trading do give an indication of theIPO‘s success, it is just as important to find out why certain investors did notsubscribe: Did they find the shares too expensive? Did management make apoor impression? Do they find the sector too risky? Rapid debriefing shouldbe conducted as soon as possible once the IPO road show is over. The initial consensus of financial analysts. In most cases, thiswill reflect their earnings estimates for the current year and the two followingfiscal years, their buy, sell or hold ratings, and their price targets for themonths ahead.