2020 was truly an extraordinary year. From navigating a pandemic to an increasingly “aware” investor base to security concerns and limited budgets, there was no shortage of challenges for IROs to manage when presented with a business crisis. There were also countless lessons to be learned, many of which were discussed in a recent webinar, “Expect the Unexpected: How to Plan for a Crisis.”
Activist investors have always been top of mind for IROs and management teams. Last year many companies got a free pass as COVID-19 disrupted businesses and created volatility in the markets. As a result of the pandemic, many activists scaled back their campaigns to let management teams navigate the economic shutdowns and focus on employee/customer health and safety.
In 2020, the number of IPOs reached 480, up from 233 in 2019, and this uptick in public offerings continues to rise in 2021. IPOs can be an attractive and strategic route to funding growth and accessing liquidity, but it’s not a short-term solution. A successful IPO means implementing wide-reaching change across your organization, right down to your corporate culture. These changes don’t end after the IPO either; there is plenty of work to be done afterward to ensure that your organization is able to successfully operate as a public company for years to come.
Last week, we witnessed a spike in volatility in the technology sector as rising interest rates fostered concerns of stretched valuations and overcrowded trades. In fact, despite a modest recovery on Friday, the Nasdaq finished more than 4% lower over the week. To see how investors positioned themselves heading into this quarter, and how that may have impacted trading last week, we took a close look at the data.
Traditionally, IR professionals are accustomed to traveling frequently to meet with investors and analysts, collecting valuable feedback to deliver to the C-suite to help shape messaging for forthcoming disclosures and corporate events. But 2020 was no ordinary year, and the same could be said for 2021 so far. However, there are some lessons learned in 2020 that can help IROs successfully navigate 2021, such as addressing market volatility, maintaining communications with the investment community, and focusing on ESG efforts.
On January 4th, Gamestop (GME) closed at $17.25. A notably large short interest in the stock of the company had already attracted the attention of the online community of Reddit users in the sub-Reddit r/WallStreetBets. The dialogue in that group identified an opportunity to generate significant buying interest in an attempt to squeeze the short interests and force them to cover by buying shares at even higher prices. On January 11th, the company announced three new board members, including the ex-CEO/founder of Chewy, an online pet food & services company. Interest in Gamestop skyrocketed, a feeding and gaming frenzy took off, and all the pieces came together in the market.
Briefing books are not new to the IR industry. Preparing management and stakeholders with the necessary data and background regarding contacts, institutions, or funds that they may be speaking with is one of the integral tasks that must be completed as an IRO. However, effectively inputting and managing data manually is a cumbersome task that leaves room for oversight and takes up an incredible amount of time. Fortunately, IROs can effectively and easily consolidate multiple data points into an informative and digestible format through the use of technology. If you’re still creating briefing books manually, consider the following as additional reasons to increase your adoption of IR-specific technologies.
The year 2020 is one that won’t soon be forgotten, and its impact will continue to be felt for years to come. From the global pandemic to the U.S. election, there seemed to be no shortage of events that brought volatility to the stock market and the economy as a whole. As social distancing became the norm, businesses sought to continue operating by adopting virtual meeting technology and enabling their employees to work remotely.
With the inauguration of Joe Biden as the 46th President of the United States today, the members of our Q4 Market Intelligence Center compiled their own inaugural report to provide valuable insights on the year ahead.
As 2020 comes to an end, IR teams are looking to 2021 with the experiences gained from an uncommon and challenging year. Bringing a unique perspective garnered from visibility across thousands of IR programs, the Q4 team hosted a webinar to help guide IROs through the 2021 strategic planning process.