For this week’s class we were asked to read numerous articles about the use of news releases in Investor Relations. One article was focused upon the influence of the different wording within new releases. Another of the articles had to do with the influence of these news releases upon market value. I am very interesting in the communication aspect of IR and was eager to learn more about the news releases that needed to be sent out in order to inform investors about companies, and comply with different disclosure regulations.
I then found an article written by Dominic Jones about the different key elements that should be part of a news release in order for investors for understand and gather key information quickly if they were using the internet as the source for the release. The articles we read this week explained more about the language of newsletter but I thought it would be interesting to see the way these were set up in order to provide as much information as possible.
As time is very important to investors, people must keep this in mind as they are writing news releases. As people typically only spend 60 seconds on a web page, and also read slower when reading from the computer, this time limitation because even more challenging with the presence of news releases being online. In order to make the release easier to understand, Dominic Jones discussed the importance of putting like information into categories. These could include highlights, financial statements, discussion of business performance and segmented results.
Another way to make readers understand the key information in the limited time they spend on the page, is to put the important information at the beginning. It helps to bullet point the key points of the article, along with putting a chart on financial statistics at the very top of the release. The use of descriptive headlines can make the key facts stand out when people are simply skimming the information. Different headers such as “Revenues rise 9%, driven by strong retail demand for accessories and Outlook for /images/0.30 EPS and 8% revenue growth maintained” will provide information will also helping investors to find the information they are looking for.
The use of links in a news release can have numerous different functions. Links are able to improve the traffic or amount of people viewing a release, along with shortening the document when there are links provided to different information. Other key information Dominic Jones mentioned to keep in mind is to make releases available in numerous different formats. Both HTML and PDF should be available. The last point was to make sure to find a newswire provider that is sufficient. Choosing wires with formatting options and that release to many different outlets is the best way to make information available and easy to read for these time crunched investors.
This article helped me to further understand what investors are looking for when they view news releases. I know understand the different components within these news releases that have the ability to affect investors opinions and the market value of stocks.
Monday, March 29, 2010
Sunday, March 21, 2010
Charactersitics of An Investor Relations Officer
For last weeks classes we were asked to read Professor Laskin's article on the roles and activities of investor relations officers. We learned about the different roles they played within the company along with the different problems facing the investor relations world today. Through class we learned that Investor Relations is typically managed by IR departments with only 27% percent being controlled by finance and 7% being concluded by communications departments. The typical activities include attending road shows and conference, responding to requests from shareholders and providing information to the top management.
After learning about the tasks typically involved in a investor relations officers day, I decided to research the different characteristics needed in order to successfully perform the IR tasks. Oliver Schutzmann put together an article entitled "A Wish List for the Ideal Investor Relations Officer".The article describes the need for fair valuation along with IR officers linking the demand for capital with the availability of capital to investors. This article also mentions the idea that IR professionals report to the CEO and CFO in order to show that senior management is very concerned with IR.
To be successful in IR these professionals need to be smart, credible and articulate due to the fact that they are dealing with intelligent investors asking tricky questions on a regular basis. Officers must have a clear understanding of the business, as well as a way for different managers to meausre the success of IR. Tasks including delivering target achievements, being able to reach target audiences and develop communications channels.
IR professionals should possess skills that can be considered both hard and soft. Hard skills include, financial communications, public relations, media relations, strategic planning, accounting, administration, legal and marketing among others. Soft skills are more focused upon personality, including credibility, flexibility, persuasiveness, loyalty, team work and objectivity. There is no definite way to learn IR skills other than participating in the activities.
IR officials may also need to be familiar with creating an IR office from scratch. To do this a professionals would create key messages about the company along with positioning it. The importance of information and transparency is mentioned in this article as it has been in so many previously discussed. While we have been learning about their specific jobs within a company, I thought it would be interesting to see which characteristics would help these IR professionals in the different tasks they have been assigned.
After learning about the tasks typically involved in a investor relations officers day, I decided to research the different characteristics needed in order to successfully perform the IR tasks. Oliver Schutzmann put together an article entitled "A Wish List for the Ideal Investor Relations Officer".The article describes the need for fair valuation along with IR officers linking the demand for capital with the availability of capital to investors. This article also mentions the idea that IR professionals report to the CEO and CFO in order to show that senior management is very concerned with IR.
To be successful in IR these professionals need to be smart, credible and articulate due to the fact that they are dealing with intelligent investors asking tricky questions on a regular basis. Officers must have a clear understanding of the business, as well as a way for different managers to meausre the success of IR. Tasks including delivering target achievements, being able to reach target audiences and develop communications channels.
IR professionals should possess skills that can be considered both hard and soft. Hard skills include, financial communications, public relations, media relations, strategic planning, accounting, administration, legal and marketing among others. Soft skills are more focused upon personality, including credibility, flexibility, persuasiveness, loyalty, team work and objectivity. There is no definite way to learn IR skills other than participating in the activities.
IR officials may also need to be familiar with creating an IR office from scratch. To do this a professionals would create key messages about the company along with positioning it. The importance of information and transparency is mentioned in this article as it has been in so many previously discussed. While we have been learning about their specific jobs within a company, I thought it would be interesting to see which characteristics would help these IR professionals in the different tasks they have been assigned.
Monday, March 15, 2010
Thoughts on the Value and Contributions Made By Investor Relations
With our final paper about Investor Relations issues being due today, I spent a lot of time over break focusing on the different ways to measure the effectiveness and value of investor relations to a company. Numerous journals online were able to help me in seeing different ways companies can measure that having an IR department is worth the time and money.
The first article summarized was by Alexander Laskin and commented on how people thought valuation, analyst coverage, trading volume and relationship building. The people responding to these topics concluded that value of Investor Relations and most closely related to a company's need to form strong relationships with those that our investing within the organization.
A second article that helped me to understand the need for investor relations, was a study of the companies that have been awarded the title of the best Investor Relations departments. The companies that had received this award generally had higher abnormal stock price and an increased availability and desire for the companies stock. This information focused more on the quantitative contributions of the relationships between companies and their investors.
The third article focused on firms ability to measure IR's effectiveness when they were to look at their outputs and outcomes. Outputs would include number of analyst reports about the company, quality of analyst coverage and the type of media coverage the corporation is receiving. Outcomes are more closely related to the numbers in a fair market price, trading volume and P/E ratio.
Each of these articles had a different focus about the ways in which IR provides values, yet each one recognized the idea that an effective investor relations division has a positive impact on the company. This paper also helped me to further understand the role that IR professionals play in keeping up with disclosure regulations, along with making sure investors understand the history, mission and goals of the companies they are buying stock from.
The writing of this paper was very interesting because I was able to view what other bloggers were saying on the topic. While I understand that it is hard to measure the value of such a new profession, I know there is a clear use for Investor Relations professionals within the market.
The first article summarized was by Alexander Laskin and commented on how people thought valuation, analyst coverage, trading volume and relationship building. The people responding to these topics concluded that value of Investor Relations and most closely related to a company's need to form strong relationships with those that our investing within the organization.
A second article that helped me to understand the need for investor relations, was a study of the companies that have been awarded the title of the best Investor Relations departments. The companies that had received this award generally had higher abnormal stock price and an increased availability and desire for the companies stock. This information focused more on the quantitative contributions of the relationships between companies and their investors.
The third article focused on firms ability to measure IR's effectiveness when they were to look at their outputs and outcomes. Outputs would include number of analyst reports about the company, quality of analyst coverage and the type of media coverage the corporation is receiving. Outcomes are more closely related to the numbers in a fair market price, trading volume and P/E ratio.
Each of these articles had a different focus about the ways in which IR provides values, yet each one recognized the idea that an effective investor relations division has a positive impact on the company. This paper also helped me to further understand the role that IR professionals play in keeping up with disclosure regulations, along with making sure investors understand the history, mission and goals of the companies they are buying stock from.
The writing of this paper was very interesting because I was able to view what other bloggers were saying on the topic. While I understand that it is hard to measure the value of such a new profession, I know there is a clear use for Investor Relations professionals within the market.
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