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Investor relations during an economic slowdown

19 July 2022
Parikshit Singh

Recession can be disorienting and put increased pressure on management and their investor relations (IR) team to take the right steps to balance investor’s need for information with the best interests of the company amidst a rapidly changing environment.

  • Consider issuing their earnings releases slightly earlier than normal to give the Street more time to digest the contents before their earnings call.
  • Use Technology to Enhance Your Communication: Today’s technology allows flexible options for groups in different places to connect with you. Maintain an open dialogue with investors, and virtual options can help you continue meeting and deliver information.

Do not cancel investor meetings. To the outside world a cancelled meeting can be extrapolated into a story – a negative story.

  • Do proactive research and capitalize on it: The impact of a slowdown-type situation can temporarily expose companies to many operational and financial risks. You need to know, which investors are demonstrating interest in the company or requesting to speak with management? and; What is their investment strategy and historical track record? Certain institutions and investors become more active in a bear market or recession type situation — your IR team needs to have the capacity to market the Company effectively to these investors and raise capital (if required) since liquid cash is very essential for Companies navigating a crisis.
  • Be Visible: Communicate often and clearly, not just when there is something new. Providing voluntary disclosures is the need of the hour.
  • Discuss operational matters rather than the most recent financials.

Finally, it is important to envision recovery. What is the end state? At some point, everyone will look back on your actions during the crisis period. Think about how you will want your company and your actions to be perceived and act accordingly. Then, once the crisis has passed, you’ll emerge even stronger.

For any Investor Relations enquiries, please contact: parikshit.singh@hcden.com

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