December 9, 2016
IR Magazine Webinar: How to use surveillance to navigate earnings, targeting, and international outreach
“Picture yourself walking into a dark room that contains your entire shareholder base. Surveillance is the light switch on the wall of that dark room.” — Matt Danziger, director of investor relations, LinkedIn
In case you missed it: IR Magazine and Q4 hosted a webinar on December 1 that dove deeper into how IROs use stock surveillance to help with earnings, targeting, and international outreach. The webinar was a follow up to our October session, Is Stock Surveillance Worth It?, for which you can find our recap with some tips here.
Here we break down a great discussion between Matt Danziger, director of investor relations at LinkedIn, and Adam Frederick, senior vice president of intelligence at Q4, who provide tips on how to leverage surveillance data for earnings, targeting, international outreach, and more.
Matt Danziger uses surveillance to create a feedback loop with his investors.
“You need to create an open window through which you’re constantly talking. That’s the feedback loop. We always make sure to reserve time in meetings to listen to our shareholders, to find out what’s resonating with them. Surveillance is your report card on how well you’re performing.”
Surveillance puts IROs and senior management in a proactive position rather than a reactive one during earnings. When you’re well informed of the buy-side’s expectations, you can begin crafting your earnings script to address investor questions before they are asked. Matt says he uses surveillance to ensure his senior management team is telling an accurate and compelling story that addresses questions head-on rather than through what can sometimes be extensive follow up.
Every earnings call is an opportunity to shape your message, and surveillance can let you know how effective you’ve been in your delivery. Surveillance pays off when it facilitates a long-term feedback loop with your investors.
“When I think about targeting and watching what’s happening within my shareholder base, I think about the health of my top 10. Are they incrementally buying more shares? Are they selling off? Surveillance can let you know if you’re meeting your goals.” — Matt Danziger
The IR industry has shifted in the past 10 years, and Adam Frederick notes that quantitative analytics now enable IROs to track shareholder patterns in real time — something he would not have said even two or three years ago. He acknowledges, however, that data in a vacuum doesn’t provide a lot of value. When a surveillance provider transforms your data into a story you can understand, you can then take note of trends that will help streamline your targeting efforts.
For example, Matt says that earlier in its lifecycle, LinkedIn was focused on targeting growth investors. But after some time, they were reaching a stage when they were beginning to receive more meeting requests from value investors. Surveillance helped LinkedIn make the most of its targeting efforts by providing real-time ownership activity data that told a story: the shift in the type of investor who is taking a position within the shareholder base.
With a void of public data on international shareholders, surveillance is a great tool to help identify how your corporate story is resonating on a global scale. If you’re seeing through ownership activity that your message is resonating more with German investors as opposed to southern European investors, you’ll be able to point to this data when encouraging your senior management team to go on road shows.
Bonus talk: Integrating surveillance into the IRO workflow
Matt relies on surveillance to help him on a daily, weekly, and quarterly basis, and he provides the following tips on how to integrate surveillance seamlessly into an IRO workflow.
Daily: A quick conversation with your analyst can clarify a shareholder move that is outside standard deviation. It can be helpful to quickly pull together bullet points on what may be driving activity: industry news, peer activity, or other factors related to your stock.
Weekly: A weekly shareholder movement table can begin to demonstrate trends over multiple weeks. Weekly comparisons will reveal whether a shareholder is ramping up their position, which can be especially useful after a meeting. When you can measure the success of your meetings for your management team, targeting becomes more streamlined.
Quarterly: The ability to step back each quarter and take a longer-term view and inventory of your IR efforts is vitally important. The work you do on a daily and weekly basis, coupled with the analysis and advisory from your surveillance program, coalesce to shape your overall narrative. By taking stock each quarter, you gain a better sense of where your message is resonating and where it may be missing the mark. Ultimately, this intelligence continues to build upon itself over time. Your message, especially around quarterly earnings calls, will become more tailored each time you deliver it.
Matt Danziger is the director of investor relations at LinkedIn and winner of the Institutional Investor award for 2016 Best Internet IR Program.