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Archives for January 2009

Which Brands Deserve a Bailout – Ford, AIG, Hustler?

larry_flint_hustler_clubThis week, two of the best known brands in the pornography industry – Hustler and Girls Gone Wild, petitioned the U.S. government for a $5 billion bailout to reposition and rebuild both companies citing a 22% loss in sales and rentals over the course of the prior year due to the increased availability of sexually explicit material on the Internet.  As far as the two brand champions, Larry Flynt and Joe Francis, are concerned — if banks and auto manufacturers could get bailouts, then why not companies that deal in pornography?

A joint press release from Hustler and Girls Gone Wild quotes Larry Flynt as defending the bailout request as follows, “People are too depressed to be sexually active.  This is very unhealthy as a nation. Americans can do without cars and such but they cannot do without sex.”  I should note that neither company is in jeopardy of collapsing.  Instead, the press release says, “The $13 billion in industry is in no fear of collapse, but why take chances?” [Read more…] about Which Brands Deserve a Bailout – Ford, AIG, Hustler?

Interactive Data for Financial Reporting and IR

In America, the Securities and Exchange Commission voted in December to require the use of interactive data for financial reporting.  By “interactive data,” the SEC is referring to unique computer recognizable tags which make large amounts of information, like SEC filings, searchable by investors and by search engines on the Internet.

No change of this magnitude comes with an instant-on time frame.  Indeed, there is a phased-in schedule that begins with the largest US companies being required to use the new interactive data in their first quarterly report that ends on or after June 15, 2009.  So, for companies using a traditional calendar year, their second quarter filing for 2009 would be required to make use of the interactive data format.  The next wave of publicly traded companies would have a June 15, 2010 deadline.  Mutual fund companies (and others) are required to follow suit beginning in 2011.

IDEA – Interactive Data Electronic Applications

The new reporting system is called Interactive Data Electronic Applications, or IDEA,  in a futile attempt to somehow force a positive sounding acronym from the new reporting mechanism.  To ensure the system is ready to go, the SEC has a voluntary program where some companies are already using the IDEA system.  Investors can access the system at idea.sec.gov.

Investor Relations’ New IDEA?

Regardless of whether a company is in the first wave of publicly traded corporations to be required to use interactive data and IDEA, it will be important for IR to be ready following the June 15, 2009 transition date.  As many professionals in investor relations are aware, a large part of the population seem at times to only read or grasp headlines without properly grasping all the salient details that accompany them.  Thus, when the masses hear a news story about the new SEC mandated interactive reporting system going live, it isn’t a stretch to assume that they’ll be pounding on the IR web pages of companies all over the Internet.

What Investor Relations Can Do For IDEA:

  • Have a Prominent Link to the IDEA System on the SEC Site. – Although the IDEA website is an SEC provided location, confused investors are likely to come looking for the new reports on the company’s website.  Having a prominent link displayed front and center will alleviate confused investors becoming agitated or contacting IR personnel.
  • Display the Company’s “Live” Date In Big, Bold, Colorful, Letters. – Investors may well be under the impression that all publicly traded companies are required to report in the new manner during that first quarter.  To avoid confusion and investors getting the wrong idea about the company’s compliance efforts, a large impossible to miss announcement about the date the company is required to begin reporting in the new format should be displayed.  Such a posting should trigger the light bulb in user’s heads and make them to realize that not everyone is using the system yet, nor are they required to.
  • When Using IDEA and Interactive Data, Provide Some Explanation – Some investors may get the impression that there is more to the system than their actually is.  In fact, it is likely that some investors may be disappointed that there isn’t something else in the new reporting.  A single page explaining what interactive data is, and how it may be useful to investors can go a long way.  Further links to the official information on the SEC website will be helpful as well.
  • Provide Press Releases and News Articles – Post a copy of any press releases or other news articles that might help investors understand the new system, both before and after the company begins using it.  These sources may contain pointers to interactive services that actually use the data which in turn can avoid the flood of questions to IR relating to what an investor is actually supposed to “do” with the new data.  Since the point of the system is really search-ability, of information, investors who already knew how to find what they were looking for in the old EDGAR based system may wonder what the fuss is about.

A few easy proactive steps can save the company IR department countless hours of unnecessary emails and phone calls (though that can’t be fully eliminated) as well as give the impression of being forthcoming regarding a high visibility regulatory change.  Make plans now to go live with content and links in early June when the first news outlets start reminding investors to “look for” the new reporting methodology.  Have additional material ready to go as well if the original content isn’t properly handling the influx of the curious.

A little action now, and a week or two of rushing and stumbling can be avoided.

Making Your Web Site More Robust, Part 2

In my last post I looked at some of the things companies are doing with charting to help investors.  In this post I”ll examine some of the less obvious ways companies can help investors gain insight into their operations.  

Glossaries – I found sites that provided a glossary very helpful. Every industry has its acronyms and special catch phrases and to the extent these can be explained and accurately defined, a lot of questions and head scratching can be eliminated. In retail, for example, a common measure is same store sales, but many companies calculate it slightly differently. A clear definition of how the measure is calculated can save both investors and investor relations officers a lot of heartburn.

Total

Along similar lines, but even more interesting, is a feature I came across consisting of a page that discussed other, non-company indicators as they may affect the company. An obvious example, (I live in Houston) is the link between the price of oil and the performance of the oil companies.   Other companies have exposure to things such as inflation, commodity prices and consumer spending to name a few, and a page where companies gather the data and discuss their outlook on these trends is quite useful not only as a data source, but also as an additional insight into how the company thinks about how it is linked to the greater economy.

Finally, while most companies today provide links to their recent earnings conference calls, very few provide a transcript of the call. Although you miss the tenor of the speaker’s voice when you rely upon a transcript, it is a more time efficient way of reviewing a conference call. It would be fairly simple for most companies to post a transcript and save us all the additional hassle of going over to the Seeking Alpha web site to get it.

None of these items requires a lot of programming or a large investment of time and effort to accomplish, but I rarely see anything of this nature on corporate IR sites.  A little bit of creative thinking by investor relations staffs could really help their sites become much more investor friendly.

The Brand Champion Exit Strategy Redux – Lessons from Apple and Steve Jobs

Back in October 2008, I wrote a post on Corporate Eye about an incident when a false report online stating that Steve Jobs, the leader of Apple, Inc., suffered a massive heartattack caused his company’s stock to drop 5.4%.  I mentioned in that post that the value of a brand champion who becomes the physical embodiment of a brand can be immense, but I also questioned what happens when that brand champion exits the company he or she has championed for so long.  Apple got a dose of that reality back in October, and now, the inevitability for Apple is back in the press again.

When Gizmodo.com reported a rumor on December 30, 2008 that Steve Jobs’ health was failing after the announcement was made that he would not attend this week’s popular Consumer Electronics Show in Las Vegas, Apple’s stock price instantly dropped by $4 per share (4.5%).   Ultimately, Steve Jobs had to issue an open letter addressing his health issues to quell the panic related to his absence and what that might mean for his company.  Once his letter was made public, Apple’s stock price rose again. [Read more…] about The Brand Champion Exit Strategy Redux – Lessons from Apple and Steve Jobs

Words and How “Live Blogging” Can Affect Your Corporate Sales

Words are very powerful. The things we say can bring lots of joy…or not so much joy. Our words have the power to change nations, change the lives of people and carry the ability to shape the future, simply with the words that we speak.  Sounds poetic, doesn’t it? However lofty sounding it may be, it is true.

Basically, the things that we say and write, and the things that are said and written about us, make a difference. They can often make such a significant difference in our businesses world that it is well worth the effort to take the time to ensure that what’s being said is at least accurate. Although there is no way to completely control what the opinions of others are (and you shouldn’t want to), what you can do is to ensure that 1.) the facts are presented, 2.) there are no unanswered questions or ambiguous thoughts and 3.) you don’t actively contribute to the speculation pool of gossip with your actions.

Just how powerful are words? Imagine having your every word typed immediately onto a platform that allows the world to instantaneously know what you’re saying. Imagine that even your funny stories, uhm’s, ahh’s and bad jokes are all on display for others to edit, discuss and dismiss. Now imagine having all of that affect your bottom line.

Live Blogging

A while back, I blogged on the idea of corporate media live blogging and just recently did a search to see how popular this idea was/is. It is quite popular. Live blogging implies just what the name suggests – – Live Blogging. Blogging while you are right in the middle of an event, a speech, a workshop or seminar. A live blogger or a live blogging episode allows the writer to instantaneously relay information as it happens. The cool part about this type of blogging is that you get information right away. The not so cool part of this type of blogging is that you get information right away. I’ll explain why later. 

Corporate Blogging

Corporate blogging has an unfortunate reputation of being stale and sometimes boring. Numbers, statistics, dry news reads, etc. Although this is not the case in every type of corporate blog, it can take a lot to convince readers to participate in a corporate blog forum. The reason why is because they’re usually uneventful and contain information that often doesn’t pull the reader in. So, the challenge of a corporate blog is to get traffic to the site and to engage the readers so that they will want to read more and come back again and again.

Live Blogging + Corporate Blogging

Bringing together live blogging and corporate blogging in one setting can prove valuable for a company. Although this is my opinion, and quite relative, what I am referring to specifically is the recent live blogging event of Phil Schiller’s keynote speech from Apple. SF Gate had a live blogging platform going on from the MacWorld ’09 event. There has quite a buzz on the internet over the past few weeks about Schiller’s keynote, the absence of Steve Jobs and the effect of that, the speculation that Apple would unveil a new product, etc. etc. No one knew what to really expect from Apple or the leaders there. Since the brand is so popular and interesting, followers are quite interested in what happens at the events, especially if they are unable to attend. Enter – – live blogging.

When a company like Apple creates such a strong brand and an almost cult-like following as they have, everything they do will be magnified and criticized. There’s just no way around it. The same thing can happen with a corporate blog, minus the cult. If corporate companies entertain the idea of live blogging, how significant would their sales change? Even if the CEO is not a Steve Job’s, or even if the product the company manufacture’s doesn’t have a digital interface or touch screen and even if it isn’t quite clear what the brand is, corporations have the ability, the power with their words via their blogs to impact their consumers. Sure sales can NOT increase, but they can also decrease. It can all hinge on what’s going on or not going on at your event. And, it can hinge on the blogger and their take on the whole program.

Live blogging can be great for sales. It can create a buzz with customers concerning any new products. Customers like to be a part of the action, to feel that they are “in”. Once they feel connected, they will follow your product, your brand, your label and your stats. Whether your company is performing favorably or not so favorably, your resource to connect cannot ever be replaced nor should it be undervalued. What can you live blog about today that will make a change, even a small one in your business? What can you offer to your customers that will make them want to watch your company’s every move? What can you do to affect your company’s bottom line?

Satisfaction for All Comers on IR Websites

We’ve discussed the idea of who the target audience of an Investor Relations website is before.  From employee and retiree shareholders, to retail investors, to analysts, and the financial media, an IR website can be expected to cover a lot of ground.  That is why Investor Relations departments try to mash so much information onto a single webpage.

Quick Investor Relations

Cisco is one of the world’s leading networking companies.  Its hardware runs inside the networks of companies big and small.  That means that it is on the minds of many people both in the technology industry and not.  Interest can jump quickly based on numerous events including media coverage that concerns the company either directly and tangentially.

The Cisco corporation can also be considered a fit for numerous investment categories, technology, networking, hardware, telecommunications, and even plain old large cap U.S., which means that in addition to a spot on the public’s awareness radar, it also commands a spot in many stock screeners or other investing tools that return companies based on various criteria.

Just how to provide useful investor information at once to the savvy retail investor or professional analyst, and the event driven investor, or investors looking for “a technology company”, can be a design and logistics nightmare.  Those who come to a company’s IR site frequently, don’t want to be bogged down with a long list of links burying the specific information they came to get, while those who are new to the site don’t want to have to figure out which menu has what, just to get a quick look at the company.

Company Fact Sheets
Cisco Systems - Overview The investor relations webpage is accessible from the Cisco homepage, though it is not visible until one clicks on Quick Links (tsk, tsk).  From there, an information packed and useful IR landing page greets potential and current investors.  All the usual information is readily accessible, stock quote, regulatory filings, financials, even events and presentations.  Additionally, a Fact Sheet link commands a prominent space in the left side menu.

The fact sheet at Cisco is, like many other companies, actually an offering of the “news” section of the Cisco website, but it contains a treasure trove of information for new investors who want to take a quick look at Cisco and decide if it is an idea they wish to pursue further.  But, since those investors are likely to arrive via the IR site, they may never find this source of information which may fit their needs better.

The easy to find link on the IR menu ensures that all arrivals have the opportunity to decide that their needs might be best served by a fact sheet rather than fully navigating the information available on the IR side.  By offloading these potential investors to this one-stop shopping style information page, the Cisco IR department can focus on building its Investor Relations web pages and navigation to suit those investors who may be making one of many returns to the Cisco IR information.

IR Best Practices

For the fact sheet to be a useful way to provide “at a glance” information to potential investors, it needs to contain links to the most commonly requested information.  Use your own experience by leveraging the knowledge of those who serve as investor contacts at your company.  They will likely be able to rattle off a small laundry list of items which are the most frequently requested by callers and email.  Position those items on the company fact sheet as well as other information that you would like quick hitting information seekers to find.  On the Cisco fact sheet for example, the company lists its many awards so that anyone viewing the sheet will see them regardless of their intention to seek out a list of such kudos.

By creating a quick and easy way for users looking to go through a lot of information one click after another, you make life easier for them.  At the same time, you relive the burden of sifting through a unruly stack of links from frequent IR visitors, creating a win-win situation for all potential and current investors.