Making tech work for small-cap IR
Small-cap IROs face two key challenges, says Darrell Heaps, CEO of IR websites and social media solutions provider Q4 Web Systems: a need to raise the firm’s profile, and a lack of resources. ‘These [issues] kind of run counter to each other,’ he says. ‘There are things you can do to generate awareness but they take up a lot of time. How do you bridge that gap?’
For Heaps, there’s a two-part solution: invest in a website that works for you, and make the most of social media, especially Twitter. ‘If a company is going to choose [one social media platform] and has limited resources, I would advise it to put more emphasis on Twitter,’ he says. ‘It has the opportunity to reach a broader segment of the market, it’s public so it can be found more easily [and] it fits better with the investment objectives of increasing awareness.’
Then there’s the website. ‘Most people recognize this anyway, but [a good website] is particularly important for small caps,’ says Heaps. ‘It can be a huge component and drive a lot of value if it can tell your story and answer questions on the company’s behalf.’
Few would question the need for a good IR website; social media is more polarizing. One long-time advocate is Rhonda Bennetto, head of IR at Great Panther Silver. Her own use of social media very much mirrors Heaps’ advice – and so far it has worked for the Vancouver-headquartered miner. Bennetto, herself no newcomer to small-cap IR, says that ‘any social tools we use are just like a detour sign back to our website’.
When posting to Twitter – and StockTwits, the primary platform used by Great Panther’s IR function – Bennetto takes a press release that has already been published and ‘turns it into something interesting’. This might involve something as simple as pulling out an interesting statistic, or highlighting something less positive. ‘In some cases where we missed our guidance or costs are high, I’ll start with that as… I don’t want people to go looking for it and feel we’re trying to deceive them,’ Bennetto says.
Great Panther also developed an online ‘analyst center’ offering buy-siders a free tool that ‘saves hours of their time’, allowing them to enter their own metrics and download the model rather than go to the sell side. And while Twitter might allow only 140 characters, Bennetto says ‘a picture’s worth a million words’. With this in mind, Great Panther uses ‘a lot of visuals’ to give a better idea of everything investors need to know about the company’s operations in Mexico.
Initially, there is a time investment, adds Bennetto, but it soon evens out. ‘As far as setting it all up and getting your alerts and your analytics in place so you can see what’s happening, that takes time but, after that, it’s only really busy quarterly,’ she says. She estimates set-up costs to be less than C$10,000 ($9,000) and ongoing maintenance across all platforms to be no more than C$1,000.
What does she say to IROs who remain unconvinced? ‘They’re not being thorough,’ she states. ‘They’re leaving out a big chunk of the investor communication platforms available and, of all those available, [social media] is critical. People are making investment decisions in 10 minutes now, not 10 days. You’ve got to get their attention.’
Darrell Heaps of Q4 Web Systems recommends: