By Michael Soni
In order to optimize the public company “experience”, companies must build a sustainable and growing market presence. This is KEY. It will unleash the unrealized value that comes from liquidity growth and as a result, the company will be better positioned to accelerate business growth. Illiquidity will no longer act as a deterrent to investment and the market capitalization will be free to rise. Market capitalization, after all, is the ultimate measurement of business growth and value for a public company.
Without a growing and sustainable market presence, the investor base necessary to support a market for the shares of the company cannot exist. With no market for the shares, liquidity remains low and acts as a deterrent to investment. With low volume and liquidity, market capitalization stagnates, business growth suffers, and executives are faced with a company whose stock has no true growth potential, thereby handicapping funding efforts.
These issues plague the vast majority of public companies and, if alleviated, would unleash substantial new value, accelerated business growth, and shareholder wealth. In order to maintain and strengthen market presence for the purposes of enhancing liquidity and accelerating business growth, four components are necessary: Content; Frequency; Intelligence, and Audience.
Investors need information to make decisions. Every month, high impact information must be available to meet the information demands of the investment community. Information created must address the two leading schools of investment thought: fundamental and technical. Investors that subscribe to one school of thought or the other must receive the appropriate information in the appropriate language. All content provided must create an investment atmosphere conducive to decision making and market efficiency.
The frequency of information plays a critical role in creating confidence in the company. Companies with stronger newsflow do better in the market than those with a limited newsflow. Investors want to feel like their decisions are being supported by the company and their liquidity risk is being addressed. They don’t want to be a member of small group of people understanding the investment merits of the company. Investors desire an atmosphere where the investor base is growing.
Understanding who to approach with an opportunity is paramount when trying to expand awareness. Once the Information-Infrastructure is put in place, a bottom-up approach must be taken when reaching out to the investment community. The most qualified, high impact investors are those that can and will actually take a position. Often, companies spin their wheels because they are not approaching the appropriate demographic. In order to be effective, one must understand who is currently investing in the company’s shares and what the stock can realistically support, based on current trading and liquidity trends.
When it comes to distribution a diverse and expansive network is a must, but the age old adage of quality over quantity has never been truer. It is more important to reach investors already predisposed to investing in the company vs. those that are less likely. This is a function of stock mechanics and a keen understanding of the capital markets, the players and how they make decisions.
Cronus Capital Markets® (CCM) is a leading capital market services firm; providing services to investors, institutions, exchanges, and public companies. Whether you are a securities exchange looking for a new index and/or ETF product, or a public company interested in enhancing corporate growth through proven market-based strategies, or an investor hoping to uncover new opportunities – CCM is uniquely positioned to deliver.
With over 100 years of investment experience in areas including asset management, equity analysis, trading, real estate, insurance, and investment banking – and from firms such as ScotiaMcLeod, TheStreet.com, Morgan Stanley, and UBS – CCM delivers a variety of investment opportunities to institutional and retail investors, alike. Through licensing, CCM Indexes; ETF’s and other structured products are created and distributed to investors on exchanges such as: the International Securities Exchange (ISE), and the New York Stock Exchange (NYSE).
CCM Research provides equity and ETF research to investors throughout the world. With the largest distribution network in place, we play an integral role in the investment decision making process by getting investors the information they need.
With a commitment to service and innovation, CCM Corporate Advisory provides capital market advice and insight to small and mid-cap public companies who desire more efficiency, liquidity, funding, and a greater base of investors. We help our clients build a stronger foundation to realize their goals.
As information continues to travel faster, and as the capital markets continue to expand, CCM will continue to provide clarity by Bridging Markets With Investors®.
Contact us at [email protected] today for a conversation on how to formulate a strategy that will attract new investors, help them make decisions quickly, and create confidence in your company.
Since 2005 ITB Solutions has provided listings development services to stock Exchanges in Canada such as the Canadian Securities Exchange. ITB Solutions currently provides New Listing Services to the NEO Exchange. We assist companies with the listing application and managing the process to become publicly tradable in Canada, as well as offering advice on how to make the most of your public listing. You can reach Jeffrey Stanger at 647-500-0492 or by email at [email protected]