Many foreign companies choose the US capital markets to list their shares to gain exposure to the world’s largest stock market and increase their visibility to the wider investment community. The larger investor base and greater liquidity on US exchanges make it easier for companies to raise capital, both equity and debt, and provide access to more diverse sources of capital, such as institutional investors, hedge funds and retail investors. Listing is an important step, but what steps should a company take to gain greater exposure in the US while located abroad?
Non-US-based companies, particularly smaller market capitalization ones, choosing to list their security on a US stock exchange often do not fully realize the investor relations efforts that are necessary to maximize the benefits of their US listing. Many smaller public companies, particularly ones not based in the US, should take proactive and often creative measures to remain communicative with their prospective and current US-based investors, research analysts and investment bankers.
In-person US investor events
Non-US-based companies’ executives should plan to visit the US in person at least once per year. Many of the company’s prospective and current investors and research analysts will likely never visit the company’s headquarters in its domicile. With the reopening of most countries after the Covid-19 pandemic, in-person non-deal roadshows and conferences are now occurring again in the major US financial centers. Non-US-based companies should consider visiting in person, leveraging their time by meeting with key stakeholders and current shareholders, covering research analysts and prospecting with new potential investors. Skyline Corporate Communications Group clients visiting the US will typically attend an in-person conference while we arrange a non-deal roadshow in the same city just before or after the conference. This maximizes the management team’s time overseas and allows more time to dedicate to telling the company’s story.
Another successful strategy has been to schedule an investor or analyst day on-site at the NYSE or Nasdaq. As an example, several of Skyline’s clients have used a bell-ringing ceremony or just an investor/analyst day at one of the exchanges as a great way to formally present a corporate update to key stakeholders and allow these research analysts and investors the opportunity to meet and speak with the company management team to understand its vision for the company, its competitive advantages and its growth strategy for the coming quarters and years. A half-day event at the exchange, followed by a few days of investor one-to-ones, group meetings and a conference presentation would help investors and management teams bridge their geographic gap.
Conferences, conferences
The costs and time constraints of traveling to the US to meet with investors in person can be steep, particularly for small-cap issuers. One of the unintended capital markets developments from the pandemic was the rise of virtual or online conferences. Even in a ‘post-pandemic’ world, there are many opportunities to present virtually at investor conferences. Non-US-based companies should seek these out and try to attend at least one virtual conference each quarter that the company’s executives are not visiting the US. Hosting quarterly or semi-annual conference calls is also a great way to keep investors and analysts engaged and informed and allow for that ever-important two-way interaction.
Be creative with social media
Because many investors and research analysts will never visit the foreign company’s headquarters, bringing the company’s products and services, offices, manufacturing facilities and individual management team members to key stakeholders in the US is essential. A company’s online presence provides non-stop warehousing of its public information that’s available all the time, anywhere in the world.
A foreign company’s website should be designed to meet the needs of investors, analysts and other stakeholders interested in understanding the company’s business and financial performance, regardless of location. Social media provides a cost-effective and practical modality to draw attention to the company. Aside from posting press releases, companies post interviews with the CEO and videos of the company’s production facilities, showcase its products in action and feature bios of key members of the company’s senior management team. These efforts and content will bring the company, its operations and its executives closer to home for US-based investors.
Key takeaways
In short, smaller and less well-known non-US-based companies should go the extra mile regarding their investor relations activities. There is an increased burden on these companies to be more communicative and make greater efforts, not less, with their existing and prospective key stakeholders in the US. Those companies that endeavor to follow some of the investor relations best practices may be able to enjoy many of the same benefits as domestic companies and achieve similar valuation multiples, robust analyst coverage, a broad institutional investor base and a favorable perception among the financial community.
Skyline Corporate Communications Group, with offices in New York City and Boston, is an investor relations and corporate communications firm that provides strategic messaging and investor communications consulting services for public corporations. Skyline provides strategic assistance for companies in the financial markets and investment community by assisting them in effectively communicating their corporate message and competitive advantages.
This content is provided by Skyline Corporate Communications Group and did not involve IR Magazine journalists. For further information on Skyline Corporate Communications Group please click here.
