ALC - Q4

As summer comes to a close, investor relations officers (IROs) need to make sure they are engaging with the right investors, are prepared for year-end marketing, and are also focusing on the 2024 IR calendar. Preparing for year-end involves a thoughtful blend of strategic planning, effective communication, and the cultivation of strong relationships with investors. This article will delve into the essential steps IROs should take to ensure a successful year-end, focusing on attending the right investor conferences and connecting with quality investors.

The Russell indices are some of the most widely followed for investment managers and indexed funds. In 2022, Russell reconstitution day was the highest-volume trading day of the entire year, generating $143 billion in trading volume in the closing minutes of trading on June 27, 2022. With roughly $12.1 trillion benchmarked to the Russell US Equity Indices, the Russell Rebalance seeks to maintain an accurate market representation through their family of Russell US Indices as the size and composition of the US equity market constantly changes. More popularly, the largest 1,000 companies form the Russell 1000 Index (large cap), while companies 1,001 to 3,000 make up the Russell 2000 Index (small cap).

Background

Last Wednesday, March 8, 2023, Silicon Valley Bank announced that it had sold about $21 billion of assets taking a $1.8 billion loss on the sales.  They also announced an equity offering to address recent financial concerns, including a potential downgrade by Moodys.  On Thursday, depositors began withdrawing their cash balances. Customers of the bank were possibly made even more fearful by warnings from a number of private equity firms who had backed their early funding and were reported to have recommended the withdrawals. Over the course of the day, the bank’s customers withdrew $42 billion. To put that in perspective, when Washington Mutual failed in 2008, it was the largest bank failure ever.  Customers of Washington Mutual drove the bank to collapse by withdrawing almost $17 billion over 10 days.  

Just a few months ago, the prevailing sentiment was that the economy is or will soon be in a recession. Economists like Mark Zandi, chief economist at Moody’s Analytics, recently said, “Historically, when you have high inflation, and the Fed is jacking up interest rates to quell inflation, that results in a downturn or recession.” Just like Mark predicted, over the last several months, the Fed proactively addressed inflation by raising interest rates while reducing its asset holdings with the goal of creating a “soft landing.” But, contrary to that kind of prediction, the results of these actions have been improved forecasts for both employment and retail sales, which are usually indicators of a healthy economy. So now, instead of facing an inevitable recession, we are dealing with market instability. This market volatility has created an uncertain vision of the short and long-term landscape for IROs. 

With the announcement of a new Proposed Rule by the Securities and Exchange Commission (SEC), the US regulatory environment has taken a giant leap forward. Ignoring ESG-related and climate-related disclosures will soon no longer be an option for many domestic (US) or foreign SEC registrants.  

Over the last few weeks, the ongoing conflict in Ukraine due to the Russian military invasion has led to global tensions and widespread support for Ukraine and all affected parties. The situation is being monitored with intense scrutiny as companies are wary of possible repercussions to their businesses, as well as to the broader economic environment.

Over the last week, we’ve been closely monitoring company responses to Russia’s invasion of Ukraine. In this article, we’ve summarized some examples of corporate responses and executive commentary relating to the Russia-Ukraine conflict. Based on our analysis, we’ve grouped the company commentary into 5 categories:

It is that time of the quarter when all the 13F filings have been made public, giving us a view of what happened over Q2. It is important for any IRO to review these 13F filings to understand the changing dynamics of your shareholder base and identify your top investors. However, 13F filings also provide a good indication of what activists are thinking and where they are focused. A new initiation through these filings could be an immediate red flag for management teams and a precursor to a potential activist campaign down the road. Also, many people look to some of these well-known activist investors for new ideas and predictions about where the economy and markets are heading. In this article, we take a look at some of the most widely known activists, including Pershing Square Capital Management, Third Point, and Greenlight Capital to examine their activities in the second quarter.