November 22, 2016
Webinar Recap: Is Stock Surveillance Worth It? by IR Magazine and Q4
“Data might be available, but putting it to use is the big challenge. Surveillance helps make sense of the data.” — Joe Pollaro, general manager, US and head of investor relations, Wix.com
On October 11, IR Magazine and Q4 hosted a webinar that answered the burning question: is surveillance worth it? Laurie Havelock, journalist and podcaster for IR Magazine, hosted a jam-packed conversation between Adam Frederick, senior vice president of intelligence at Q4 and Joe Pollaro, general manager, US and head of investor relations, Wix.com, who has been using stock surveillance since their IPO three years ago.
The panel offered some valuable takeaways for IROs who may be wondering how to take advantage of new and quickly evolving technology.
For Wix.com, surveillance data helped identify big movements in their stock post-IPO, like VC selling and investors who took big positions and then turned over. Three years later, they continue to leverage this information by taking note of vast amounts of data that has been translated into trends they can take action on.
New technology is leveraging vast amounts of available data and years of analyst experience. Advanced algorithms, machine learning, and artificial intelligence are telling more comprehensive stories than ever before. Surveillance should be helping you craft your company story for your investors, management team, and your board.
#2 Surveillance is more than identifying buyers and sellers.
“Surveillance is more than shareholder identification. It’s real-time targeting and knowing what is truly driving supply and demand.” — Adam Frederick
Joe Pollaro at Wix.com uses intraquarter insights to better understand whom he should be meeting with at conferences or during NDRs. He is able to target people whom he suspects are buying or selling, and then develops shareholder messaging that helps him remain engaged with his targets at all times.
Adam Frederick recommends reviewing your surveillance targeting list and tailoring the list based on who is buying and selling your stock. You may want to consider switching out growth names for GARP or value names.
#3 Stock surveillance is becoming more of a science than an art — almost.
While technology is moving surveillance from art to science, it’s important to remember that accuracy is a relative term.
“Some people expect that surveillance is an accounting mechanism, but surveillance is not meant for this. It’s meant to give you insight on big picture moves in real-time, so you can make informed decisions and bring them to the board.” — Adam Frederick
Surveillance leverages years of analyst experience with advanced technologies such as algorithms, machine learning, and artificial intelligence. The more experienced your analyst, the more accurate your results. It’s important for an IRO to think of surveillance as a way to see big picture trends and use granular information to answer questions, rather than as an exact stock price calculation method.
Additional best practices
Be careful about the information you take to your management team. Surveillance is about gleaning big picture trends and sentiment, and you don’t want to have to backtrack on a detail you’ve provided.
“It would be a mistake to run to your management team and tell someone a shareholder has doubled a position until you’re sure.” — Joe Pollaro
Surveillance is useful for tracking European markets, too. While there may be different disclosure laws overseas, options trading, quantitative perspective, big data analytics, and trading analysis crosses over to foreign markets very well. Wix.com has applied surveillance to their European investors and reports that it has been effective.
Upcoming webinar — Drilling down: using market intel to navigate earnings, volatility, targeting, international outreach
Join us, along with IR Magazine and Matt Denzinger from LinkedIn, on December 1, as we drill down and discuss how IROs are leveraging market intel to navigate earnings, volatility, targeting, and international outreach. We’ll talk more on the role stock surveillance can play in areas such as earnings, periods of volatility, short selling, targeting, and international outreach. Register today.