Chapter 8: Investor Relations

Investor relations affected my summer job extremely, it caused people to quit and/or get fired. Investor's started losing interest with all of the money and downfall of the recession the past year. The enviroment that the business was in wasn't affected a lot but it was enough to have a "ripple" affect on some of the businesses. My job basically recieved it's money from investors and state grants. With the economy in a downfall grants weren't being distributed and investors were pulling their money out of the company. Four supervisors quit and the business was just in a "slump." The business just started getting back on track this past year after the economic recession. The company found new investors and is really doing great.

Ch.8 Investor Relations (IR)

Investor Relations (IR)has become an essential and indispensible arm for any company that is trying to raise capital in order to sustain its operations and maintain profitability in the extremely competitive website. No longer are the days when investors had to hold on the phone line or wait for a letter in the mail in order to get hold of or obtain a reply from an IR representative to get the information on their stock holding. With the increase in usage and innovation in the communications tools, investors are looking to get instantaneous information from companies in order to maintain their holdings or just spin them off their portfolios at the slightest change in their performance. Moreover, with the current economic crisis firms have to constantly communicate and engage their investors in order to get their attention and get their much needed financial support. Companies are realizing the importance of reaching out to investors and are making every effort to get their attention by using the latest platforms of engagement such as blogs, website, email lists, and other social network sites like Facebook, Twitter etc. which have gained such immense popularity that companies have started maintaining a dedicated team to actually update contents and reply to blogposts within minimum timeframe. This also affirms among the investors; a trust that the company is speaking to them just like a real person.
Another key tool used by companies is the increased use of webcasts, which record the actual meeting between the management, analysts, investors and stockholders and is uploaded on the company’s website so as to provide the latest buzz about the company from the CEO or Chairman (i.e. right from the horse’s mouth.)

One of the examples of corporations making their detailed financial information available to existing and potential investors is Goldman Sachs, a global investment banking and securities firm which engages in investment banking, securities, investment management, and other financial services.
It has a detailed and updated information about its financials including the 10-Ks and the 10-Qs and their filings with the Securities and Exchanges Commission (SEC) from time to time highlighting its transparency of its funds and its operations. This has helped Goldman Sachs immensely in maintaining its stock price steady even when some other firms within the same industry are struggling for much needed funds from the open markets.
Its investor information is accessible at: http://www2.goldmansachs.com/our-firm/investors/index.html

Chapter 8: Investor Relations - Ryan Kirsch

My previous company had corporate personnel responsible for investor relations (IR); however information was rarely, if ever, provided to staff employees. As far as I could tell, there were some employees (i.e. executives, VP’s) who owned shares of the company but essentially the company was owned by a private equity firm. First-hand, I do not know the role our investor relations personnel played in the company, but I would assume their roles were similar in function to those of publicly traded companies.

The following is advice quoted from a blog from Tom “Toronto” Reidt, Title: Potential Roles for PR in a recession, February 1, 2008:

“If your stock is falling, or your business isn’t getting the returns it used to, the investors are going to want some serious reassurance. Investor relations should be a crucial facet of any business in a recession. If your ROI is coming back red, and your company remains silent, investors will be dropping out faster than Rudy Giuliani [referring to the 2008 presidential election]. If you employ some excellent IR, you can maintain their trust and hopefully keep them on board.”

“Productivity and profit are directly linked to how engaged, enabled and happy the employees are. Nothing puts more strain on employee relations than a recession. Potential layoffs, salary increases and bonuses getting the axe, terms like “restructuring” being tossed around, it’s a time of high anxiety for everyone. A good internal communications plan can diffuse the tension, reassure doubts, or at the very least, keep people in the loop about what’s happening.

To read this blog and comments left by others, please use thefollowing link : http://tomtoronto.wordpress.com/2008/02/01/potential-roles-for-pr-in-a-recession/

There are many videos on the web showcasing the global fear and panic investors felt during the recent recession and stock market collapse. If you want to share your experiences or provide a suitable video please leave your comments below. Thank you.

Chapter 8: Investor Relations - Cynthia Wolfel

At first I thought relating the impact of investor relations (IR) to my current work environment would be difficult; conversely, after a little more contemplation the realization that it was very pertinent occurred. I am presently not working in a business environment, per say. I am attending IUP as fulltime graduate student with an assistantship and work study position that are state and federally funded. Investment has affected school budgets, since there has been a lack of return on funds previously endowed. I personally have watched my 401K take a nose dive, but it was a company contribution plan; so, I was not terribly upset by the loss. There is a renewed sense of fear in investments for many individuals since the ‘recession’.

Additionally, since I am obtaining my K-12 BCIT PA teaching certification, my possible future retirement plan is being changed as you read. See the following site for some background information: http://www.pittsburghlive.com/x/pittsburghtrib/s_623405.html
There are several issues surrounding teacher retirement funding and many teachers that leave positions are not being replaced. Both of these issues will definitely affect my future. These sites also contain relevant information:
http://www.psea.org/general.aspx?id=2626
http://www.caldercenter.org/PDF/1001071_Teacher_Pensions.pdf

There are funding issues for both the University of Pittsburgh and IUP due to the recession and lack of investment revenue. Part of the reason I am at IUP is that companies are not providing workforce development due to budget cuts, which was a good portion of my previous teaching. The recession seems to have sent more people back to post secondary school. Corporations are not the only ones competing for investment dollars. Post secondary education is a business that focuses on enrollment numbers and utilizes advertising to increase those numbers. Many of the same strategies used for corporate investment are used to increase enrollment, such as a clear vision and mission, which have been revised in the past few years by many institutions.
http://www.iup.edu/upper.aspx?id=2065
http://www.ir.pitt.edu/factbook/fbweb05/general/MISSION.PDF

There have been logo, motto and mission statement changes made so post secondary schools can appeal to the current market. Board meetings are held to ensure expectations are appropriate for future expansion plans and monetary funding. Volatility is reduced by trying to predict and appeal to constituencies, such as: investors, alumni, parents and students. Like a business many constituencies must be placated and investors can be grouped to address their particular concerns. Student retention rates are a major center of attention due to continued enrollment dollars. Since there are numerous investors in post secondary education, it requires the use of diverse communication channels due to age, socioeconomic status and local demographics just to name a few.

Furthermore, proactive planning is necessary to quell the negative publicity that can occur. For example Penn State was negatively impacted for several alcohol related incidents and racial issues in the not so distant past. Virginia Tech. is a true crisis example. It is important for post secondary institutions to have more than just a reaction to adverse media attention to ensure future investment and enrollment. Rating agencies are important intermediary constituencies for post secondary institutions, which can be beneficial or not depending on an achieved ranking. Several ranking listings are available and a few are provided here:
http://www.usatoday.com/news/education/best-value-colleges.htm
http://www.usnews.com/sections/rankings
http://www.4icu.org/topNorth-America/

Globalization has helped to expand the market for post secondary revenue adding an international constituency base; however, there was a global recession. IR is a primary center of attention for post secondary institutions that may spread to secondary schools due to budget restraints and the existence of cyber schools and technology centers – personal choice. Competition for investment funds in the form of students, parents and investors is becoming increasingly more important at the secondary level. An example of positive image advertising for cyber schools in Pennsylvania follows. Please view the advertisement before the video.
Advertisement: http://www.pacyber.org/newsroom/article_results.aspx?ArtID=148


http://www.youtube.com/watch?v=RKQJ8oZpykY&feature=player_embedded#!