Shane Smith looks into the future of non-deal roadshows
Q: How soon can we expect virtual non-deal roadshows (NDRs) to play an important part in the IR toolkit?
A: The first question is: what will be the catalyst that pushes virtual to mainstream?
Oil at $200 a barrel? A volcanic eruption? Bird flu? A major buy-side CFO’s realization that it’s no longer necessary for portfolio managers and analysts to travel to acquire the information they need? We can’t know where history will pin the catalyst, but it is unimaginable that the landscape in five years will look the same as it does now.
It’s not a question of virtual meetings replacing the in-person version, but complementing them. No IR team has the capacity to reach all capital pools physically, so every issuer is leaving some of the benefits of good IR (cost of capital, shareholder value) on the table. But is virtual now a match for physical? Yes, absolutely.
My firm’s technology allows us to operate the issuer’s broadcast studio robotically, from a production center in London. Executives at the issuer can sit down and deliver their presentations from the autocue as an HD broadcast to the live global audience.
Then there’s the Q&A and one-to-one sessions: all recorded, all transcribed, all with simultaneous translation. This makes for very efficient use of executive time, and issuers can still do traditional NDRs when the incremental cost is justified.
For their part, the NDR audience can choose just to watch, or to go into full interactive conference mode. Either way, they get to ask a question and see a whites-of-the-eyes, HD-quality answer. The system is PC-based, so the audience can be anywhere. An iPad version is available, too.
The service was originally designed to complement the research platform built for the London Stock Exchange with small and mid-caps in mind, but the level of interest from global large caps, using it as an adjunct to physical roadshow programs, has been surprising. Beyond calendar events like NDRs, these issuers gain additional value from ad hoc events such as M&A discussions and internal communications.
There is an important distinction between this built-for-purpose platform and videoconferencing. The service is a broadcast model, so professional operators are controlling broadcast-quality equipment to make sure blue chips receive appropriate treatment.
Broadcast also allows for a single ‘one-to-many’ event, as opposed to multiple smaller events. This is a powerful combination.
Removing the need for the audience to be in a dedicated facility means there is no impediment to joining the event, allowing successful dissemination of the issuer’s message. Finally, add to the mix services in audience targeting and profiling, translation, transcription and recording, and it’s a different animal altogether.
Shane Smith is chairman and CEO of International Capital Connections.
