Should MicroCap Public Companies Pay For Research Coverage?
“Life as a small or micro-cap public company is getting harder by the day as the pool of buy-side interest is shrinking almost as fast as sell-side research, and sales and capital markets sponsorship is contracting” says David Collins, managing director of Catalyst Global.
While microcap IR is more difficult than it was years ago, credible support can be found the form of company-sponsored (or paid-for) services. According to Collins, there are a number of areas of service where companies can make modest investments to augment the reach and impact of their IRcommunications including:
• Research coverage (check out the OTC Market’s Research Marketplace)
• Investment conferences
• Meetings and roadshows
• Free or company-funded media visibility in online, print, video, TV or email formats
So, Should MicroCap Public Companies Pay For Research Coverage? According to Collins, the answers is YES… but perform due diligence on service providers to ensure they are quality providers.