For Public Companies, Communicating With Investors is Essential
Since Snap, Inc. went public earlier this year, its stock’s value has decreased by about a third. Earlier this month, Snap founder & CEO Evan Spiegel said he’d learned a lesson: For public companies, communicating effectively with investors is essential.
“One of the things I did underestimate was how much more important communication becomes,” Spiegel said on Tuesday at the Vanity Fair New Establishment Summit in Los Angeles. “When you go public, and you really need to explain to a huge new investor base — instead of having 10 investors, you have 10,000 — you have to explain how your business works, and at the same time that you need to do that, there are also all these new regulations about what you can and can’t say.”
To support Spiegel’s lesson learned, a recent study by Weber Shandwick found that 80% of major buy-side investors give non-financial factors “a lot” or “some” consideration when making their buying decisions. The No. 1 factor they consider is their confidence in management.
According to Bloomberg, this means that one way management teams can increase investor interest is by investing in their own communications, in order to reassure financiers about the quality of their leadership. Bloomberg shares four ways to do it:
1. Communicate often and directly with investors.
2. Openly respond to investor fears.
3. Convince investors that you’re prepared to handle crises.
4. Communicate the chief executive’s and company’s values proactively.
Learn more HERE.