Case Study: Reversing Wall Street Sentiment and Increasing Investor Awareness
A 13-year-old company was experiencing revenue declines and mounting losses. Prior to the engagement of Chesapeake Group, the company had utilized several IR firms during its 7 years as a publicly traded company with limited success. The overall stock price had declined 98% from its initial trading month until the time Chesapeake became involved. It traded on the OTC.
The company was in the middle of a transformational year with an unproven, yet positive outlook. Chesapeake’s goal was to make sure management delivered a clear message that past results were not indicative of where the company was headed.
Chesapeake Group's Methodology
- Created or revised all investor materials. Ensured the company had an accurate PowerPoint, executive summary, fact sheet and Video interviews that included forward looking statements and ProForma Financials and Guidance.
- Determined upcoming milestones, product releases and financial measurements that enabled investors to see the company’s accomplishments in “real time.”
- Orchestrated a consistent and timely PR strategy that included press releases and media coverage.
- Held monthly conference calls for investors to ask questions and understand the progress the company was making.
- Advised management of how to use GAAP and non-GAAP financial metrics to aid the investment community in evaluating the company’s performance.
- Established multiple interviews with media outlets during which Chesapeake coached management to better highlight their progress in the simplified verbage investors demand.
- Implemented a specific strategy so investors could clearly understand where the company had come from, the obstacles that it had overcome, the progress they were making and the sound reason for optimism moving forward. In essence, Chesapeake helped convince the marketplace of the company’s rapid improvement.
- Helped the client with regulatory disclosures and ensured that press releases were SEC compliant.
- Engaged in an aggressive, proactive outreach program with financial professionals. This included educating the professionals on the potential undervaluation of the client’s stock price. Chesapeake logically and consistently presented the client’s sales, earnings, cash flow and balance sheet ratios relative to its peers.
- Highlighted industry developments and made suggestions on how they might impact investors’ view of the company.
- Helped improve the company’s balance sheet by introducing the company to various financing institutions. Through a series of accretive and investor-friendly funding efforts, the current and quick ratios improved to levels necessary to support continued price appreciation.
Through Chesapeake’s efforts, the clients’ stock price increased 1,800% during the first year it was engaged with Chesapeake, and its trading volume more than tripled. The company was among the top performers for all stock exchanges worldwide.
The overall sentiment of the company became extremely positive with independent analysts and media suggesting the company was poised for even more success in the future. Through daily contact with the financial community, Chesapeake Group was able to change past years’ poor opinion of the company in a very short period of time.
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