Target 3 Investor Relations Blog

XBRL Watch

2009-07-30T09:03:00.000-07:00

In case you didn't know, XBRL (eXtensible Business Reporting Language)is an XML based language purposed with the ease of transmission of financial data. Additionally, this video gives a nice little introduction:

So far over 60 companies have produced XBRL statements (SEC rule) and there are over 400 more on the way this summer. I've been looking for evidence of problems but have found very little. This is very encouraging news. XBRL is on pace to become ubiquitous in the investment community and I hope investors begin to make use of the technology.

At Target 3, we are very supportive of the XBRL initiative and have partners with XBRL expertise to provide our clients with any additional support they may need.

It will be interesting to see what the effect of the XBRL conversion will be. My hope is that XBRL allows investors to better differentiate between similar companies and as a result more deserving small caps will get a noticeable long term bump relative to peers.

Using Social Media in Investor Relations -- Part 2

2009-06-25T11:42:00.000-07:00

Continuing our series on social media in IR, I'd like to discuss a few ways that we have learned to use some of these tools.

For starters, Meetup is a networking site that I have used personally for some time (it's great for when you move to a new city), but only recently have begun to experiment with as an investor relations tool. For those that are not familiar, Meetup.com is a place for like-minded individuals to congregate into groups for the purpose of face-to-face gatherings. There are groups of every imaginable kind including investor clubs.

Now, This can be a great IR resource for at least one reason. The members of these clubs tend to be relatively young. This is in contrast to what is typically found in your database where investors are more likely to be older. Therefore, it's a great place to connect with new investors who are more likely to be active and influential in the future. In fact, I'm tempted to make the same observation about all social media tools in general. Additionally, although I have no hard evidence in support, I suspect that the investors active in social media are more likely to want to invest in technology.

As for Meetup usage, here are a few ways we're beginning to use it.

Use investor club Meetup gatherings as pitch venue, similar to a roadshow with several participants. This can also approached by IR staff in lieu of management.
Network through these participants to other individual investors and organizations which you can add to your database to increase the magnitude of your other IR efforts.
Take advantage of the collaborative nature of the groups to gain valuable market intelligence insights.

In other words, think of it as a free conference with an audience that is more unknown. I'm interested in hearing how other IR professionals are working with this site, if they are at all.

So that's all I have for Meetup. This weekend I'll find a few moments to talk about Facebook and Twitter which are the sites that everyone has been in love with for the last few years.

Using Social Media in Investor Relations -- Part 1

2009-06-19T13:43:00.000-07:00

Did you know that 57 percent of all internet users have an online profile? Social media on the internet such as Facebook, Twitter, and Youtube have changed the way we communicate. As such, it is changing the way we communicate in an investor relations capacity as well. This blog entry is the first in a series that will examine the way investor relations can be performed using social media.

It is now generally accepted that public corporations should establish social media policies, and not only for IR purposes. When friends read personal messages on social networking sites, it is sometimes easy to gather information pertaining to the writer's employer. In this way information can be disseminated that would otherwise not be. Generally, however, social media is to be viewed in a positive light. Used proactively, social media opens up avenues of information exchange in real time to audiences that can be extremely focused and receptive to your message.

Through social media it is possible to target audiences very precisely and engage in a true dialog in real time. We are only beginning to tap the great potential of these new technologies.

Additionally, It is important to remember to stay within the boundaries of Reg FD and not disclose information that is not available to everyone. This is the inherent danger of social media in IR. Therefore, we recommend using the company website as a central point in all communications. Put everything there first and then use that information as a starting point for dissemination in social media channels.

And above all, content is king. More communications means more noise in an already noisy world. We believe it is important to always prioritize quality over quantity in all IR communications.

Consider some of the more popular social networking entities today:
Facebook
Twitter
Seeking Alpha
Stocktwits
Meetup
Youtube
Blogs
Slideshare
LinkedIn

Over the next several days we will address each one of these tools individually and discuss some of the ways in which we are using them to reach IR goals. We welcome your feedback and ideas as well.

The growing importance of investor relations

2009-05-22T12:10:00.000-07:00

As the world changes and, more specifically, as the economy changes, investor relations is becoming a more crucial component of everyday corporate operations.

For starters, investment banks have taken major blows during the financial crisis. As a result they are no longer able to provide some services that they could in the past. Road shows in particular are being arranged by investor relations firms more now than ever before.

New media such as blogs, social networking sites, and RSS provide new channels for communication between firms and investors. Investors in particular are becoming very savvy in using these mediums to gather information about investment opportunities. As this complexity of communication increases the challenge of effectively communicating with investors grows as well. Make sure your IR team knows how to navigate these waters.

Finally, globalization creates new opportunities for investment as well as sales. The opportunity now exists to cast a very wide net in finding new investors. Your IR firm should literally be searching the entire world for you.

Some Good News

2009-05-06T13:10:00.000-07:00

I thought I'd take a minute to recap some of the more positive news developments that have come about.

For starters, recently Ben Bernanke stated that an economic recovery was on the way.

The stock market has regained all of the losses it suffered earlier this year and then some based on, among other things, reports that bank balance sheets are not as bad as we thought.

Job losses are slowing.

In addition to these newsworthy developments, there is more financial information available than ever and the financial markets continue to globalize.

It now occurs to me that a firm's need for a solid investor relations effort is paramount today. Businesses need to make sure that the information they disseminate rises above the ambient noise of the markets and supports its larger story.

If you would like to know how we can help you, come visit us at Target3.com.

Rule Changes

2009-04-16T11:01:00.000-07:00

NYSE Changes Press Release Rules

A quick post today about some of the rule changes that are occurring in the major financial markets. First, the NYSE is finally updating their policy on information dispersal for listed firms to match that of the SEC's. Previously the NYSE required firms to distribute their news via email or fax to Bloomberg, AP, et al. Now firms will be able to disseminate information by an Regulation FD compliant method. Now corporate websites will be sufficient channels of communication, which is simply common sense given today's communication capabilities.

NASDAQ had already enabled enacted similar rules. Additionally, NASDAQ has enacted a number of rule changes resulting from the current economic conditions. For example, firms will now have to be trading below the delisting threshold for 30 consecutive days and once that occurs will have 180 days to regain compliance.

For a comprehensive description of all of NASDAQ's changes, click here.

FASB Rule Changes

2009-04-02T08:55:00.000-07:00

The FASB rule changes adopted today are very interesting. In case you missed it, the changes, allow the assets to be valued at what they would go for in an "orderly" sale, as opposed to a forced or distressed sale.

I find this interesting because this seems to be contrary to the spirit of transparency. If I understand this correctly, under the new rules banks will essentially be able to make up whatever valuation they find appropriate instead of using information from the markets. It seems to me exactly the kind of mistake you can expect to be made in a crisis. Congress pressured FASB to make this change with the hopes that increased valuations would provide banks more capital to make more loans. Of course, the problem it creates is that if banks are allowed such discretion to value assets we open ourselves up to even more shenanigans in the future.

It is somewhat tangential to investor relations, but we at Target 3 believe that transparency is, on the whole, a good thing.

Geithner: Comprehensive Reform

2009-03-26T10:34:00.000-07:00

Treasury Secretary Timothy Geithner recently testified to congress about the need for "comprehensive reform" in the financial system. Among some of the specifics he asked for are a regulator to oversee the financial system and hedge funds needing to register with the SEC.

The question of how this affects investor relations is more unclear of course. Changes like these probably will have little to no effect on short term IR practice. However, if the financial system is stabilized that is always good for firms looking to participate in the capital markets.

This raises the question of whether reforms more directly related to the practice of investor relations are coming. My guess is that we won't see any major changes for a while in reporting rules. There is just too much on the plate of regulators nowadays. Rather, news such as this needs to be most importantly viewed in terms of what this does for investor confidence.

It seems that the recent trouble caused by AIG and the over-leveraged investment banks has created an appetite for more regulation in the markets. Perhaps the recent uptrend in stock prices can be viewed somewhat as an agreement with Mr. Geithner's position.

Personally, I welcome changes like this. The sooner confidence can be restored, market efficiency will improve and the investor relations challenges facing many small pubic companies will become that much more manageable. Now is as good a time as ever to confront those challenges head-on.

Welcome!

2009-03-26T10:28:00.000-07:00

Welcome to the new Target 3 Communications blog. We will be using this space to address the topical issues of the day. If you have any questions please feel free to contact

Jeff@target3.com or

Jerry@target3.com

Thanks!