There are many who believe that there is no point to pursue an active IR effort, because shares live their own lives and fluctuate with the market in general. This applies especially when stock markets fall, as they do right now.
Most of these people seem to view IR as some kind of quick-fix or a useful tool to be used on special occasions. But as with most processes, there are no shortcuts. To create a strong confidence in the company and its management and ultimately a more accurate valuation of the shares, an active and transparent financial communication over time is required.
Good IR is always valued higher than poor or nonexistent IR, this applies to both bull and bear markets.
For example, potential acquisition opportunities, at least with attractive price tags, tend to increase in a deteriorating market climate. Companies with a high trust factor can expect to receive better conditions and greater access to financing than companies with a low trust factor. If the company also has a share that is correctly valued, it has access to a strong currency to use as payment.
The conclusion is that good IR is worthwhile at all times, but it is perhaps in bad times the value of a good confidence can be fully exploited.
/Mikael Zillén, @mikaelzillen
Founder & Digital Specialist
+46 762 13 00 40 | mikael.zillen (@) boxcomm.se
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