ALC - Q4

The headline story of 2021 has been the rollout of COVID-19 vaccines and the reopening of the world economy after an unprecedented shutdown last year. For the first half of the year, everything seemed to be rolling smoothly with equity markets at all-time highs, the Federal Reserve keeping accommodative monetary policy, and expectations for strong economic growth on the horizon. In fact, earlier in May, we released an article discussing how many people, including JPMorgan CEO Jamie Dimon, were describing the current economic state as a “Goldilocks Economy” – a period of fast and sustained growth accompanied by gradually rising inflation and interest rates. Some aspects of this story have played out as investors expect.

While the road to becoming a public company may appear to have long been standardized, new paths and new types of public companies are changing the landscape. Recent Direct Public Offerings (DPOs) have demonstrated that there are viable options for tapping directly into public markets – though these companies are often well-known and well-funded prior to going public.

Recent events have highlighted the fact that millions of retail investors are gathering online in chat forums like Reddit to discuss public companies every day and millions more are investing in the public markets for the first time. While the phenomenon of retail investors relations is nothing new, the dynamics may have changed. With this in mind, now is a good time for IR teams to refresh their digital investor relations strategy.

Markets have been off to a hot start to the year and are up over 11% through the end of April. In fact, this may be the best start to a presidential term since the days of Franklin D. Roosevelt after the Great Depression. Much of that has been driven by the optimism of a reopening economy, businesses bouncing back strongly, and earnings beating expectations. Earlier this month JPMorgan CEO, Jamie Dimon, noted in his annual letter that the U.S. economy will likely see a boom driven by excess savings, new stimulus measures, accommodative Fed Policy, a new infrastructure bill, and optimism around the end of the pandemic. All these factors build-up to what he called a potential Goldilocks economy moment with fast and sustained growth accompanied by gradually rising inflation and interest rates. As a result, all 11 sectors of the S&P 500 are in positive territory for the year with some of the more recently beat-up industries like Energy (+30%) and Financials (+22.7%) leading the way (as of 4/30).

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.

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. 

This year has been a tumultuous one for many, but Canadian gold mining stocks have been one of a very few industries to benefit from the coronavirus pandemic, reporting strong performance since the global health crisis hit in mid-March 2020. Viewed as the ultimate store of value, the precious metal has gained 15% since the start of the year.

This year has been one of tremendous change for the global capital markets, including changes in regulations and structural shifts that have influenced investor sentiment, decision-making, and how companies engage with the investment community. These changes, combined with the new virtual environment, have had a huge impact on IR programs and how IROs engage the sell-side.