When I went through the whole chapter on investor relations, I realised that communication of the company’s performance through intermediaries is the key to having a sound investor relationship whether through the media, agencies, or the analysts. It seems that the media play a key role in investor relations with companies and therefore most companies would go to great lengths in having a good relationship with media houses in order for its image to remain reputable.
Its also interesting to see how the internet phenomenon has influenced the way companies announces their annual performance reports. It’s evident that the internet continues to play a key role in the way companies release their financial results. One question that really bothered me when I went through the whole chapter is why most companies (over 80%) still release the print version of their performance reports. I think, its more expensive to make a print version of it than to have the online version which can be viewed by millions of people across the globe. From my understanding, the printed document is sent to a limited number of investors who mostly are the shareholders and not everybody in the public domain, whereas on the other hand, online financial reports can be viewed by many millions of people who browse the internet everyday. Thus, from this perspective I would think that, most potential investors are more likely to view the online version of the financial reports.
Another interesting thing that I noted from the chapter is about individual and institutional inves
tors. I must appreciate that as a matter of fact most companies focus more on institutional investors because they invest on long term other than short term and this therefore would make the prices of the company’s stocks become volatile. I think its for this reason that institutional investors hold more stocks in the
One case scenario is back in my country where I come from where the stock market is relatively not developed, there happened to be this company that offered stocks to the public, and due to intense media coverage, there were massive oversubscription of the stocks whereby in addition to institutional investors many individual investors applied for the stocks. These individual investors main reason was to sell the shares when the prices goes up, so immediately the initial public offer was over they started selling the shares and the stocks prices went down. For the next couple of months the company’s stock prices were trading below the initial offer price. More over, the company was faced with an uphill task of organizing an annual general meeting because of the large number of individual stock holders. The venue and other logistics for the annual general meeting became a nightmare for the company because of the large number of individual investors. This posed a great challenge to the company in terms of costs of holding such an annual general meeting. Its for this reason, therefore, I think many companies would rather wish to have institutional investors than individual investors…
