Thoughts on Making Investor Perception Surveys Earn Their Keep

It may sound self-serving coming from IR consultants who offer investor perception surveys - but I do believe there is much merit in using an experienced third party to conduct such research. The reason is that many investors are reluctant to provide negative feedback to management teams out of fear that it could harm their relationship and negatively impact their access to management for questions, updates, etc.  

Using a third party that enforces the anonymity of respondents - and makes this clear to investors being surveyed - can help elicit more constructive responses about all aspects of the Company, from management's competency, corporate governance and even the IR program and effectiveness. 

The perceptions are reported in a general way – as coming from “Institutional Shareholder,” Sell-side Analyst Covering the Company; Sell-Side Analyst not covering the company; etc.

Of course many investors are very free in expressing their candid views - and want their comments associated with their name (and likely have regularly expressed their opinions to management in the past) - so for some percentage of investors this third party approach is not necessary. 

Additionally – most perception surveys focus on the key investors in the stock and analysts covering the stock – but identifying issues that could be affecting those who have not yet initiated a position or coverage – is probably more important than those who are already “converted.”  The nature of the questions is also critical as chosing between: 1) Strongly Agree; 2) Agree;  3)Neither agree nor disagree or 4) No Opinion  - when the asked to respond to the statement: "XYZ Corp. is clearly focused on financial discipline and shareholder returns" provides little room for value-added perception gathering! 

Finally, it makes most sense to report perception research to the board of directors so that they can assess the key issues affecting the company's share price without a C-Suite filter (easier said than done in many cases).

A closed circuit perception study - where critiques are fed back only to those responsible for the IR effort - will tend to lead to no meaningful adjustments - and is therefore a likely waste of time resources rather than  a productive exercise.

I know this sounds a bit cynical, but unfortunately in our experience, companies that can benefit most from perception research (and making the adjustments that the research identifies) also tend to be those that are less likely to bring IR perception issues to the Board for consideration.

Given the importance that investment community perceptions have on equity valuations, it really does seem to be worthy of regular board discussion – but from our experience – primarily in the realm of small caps – this is not an issue of much Board level focus – until it’s too late and the activists are knocking at the door.

We're always happy to speak to Companies about our perception survey work - and how to optimize the ROI from the effort. 

David Collins
Managing Director
Catalyst Global 
212 924 9800

Initial Thoughts on Goldman, Sachs' Q3 Reporting Experiment

We’ve provided some screen captures of Goldman, Sachs quarterly results reporting as it appears on TD Ameritrade this a.m. The same analysis can be performed on other financial portals to judge the success and efficacy of the alternative approach. 

Clearly the financial community was poised for the report and the news flow was seemingly unimpeded by the change in disclosure methodology which eliminated paid wire service dissemination in favor of a website led disclosure supplemented by Twitter communications. 

Note that in order to achieve broad instantaneous disclosure of its financial results outside of its website and Twitter activity, we have been told by reliable sources that Goldman provided its news release in advance to certain financial media, such as (we presume) Dow Jones, Reuters, Bloomberg etc. so that they could prepare the content and report it simultaneously with the web release. 

A few cursory observations on how it went (from TD Ameritrade's news sources - example screen grabs provided below):

• In our observation, Goldman’s release appeared on their website at 7:35am ET – possibly 7:34am ET however, Dow Jones' headlines started reporting the results at 7:33am ET. 
•  From our observations, the Zack’s coverage, while it says 7:06am ET, did not appear prior to the Dow headlines and seems to have been “post dated” in its posting to 
• None of the Goldman headlines on TD Ameritrade provide direct links to the full content of the Goldman release – whereas in the Q2 reporting cycle the full text of the release is accessible by clicking on a series of Dow Jones headlines.
•  The absence of a broad, simultaneous distribution of the entire news release to financial portals such as TD Ameritrade remains our principal critique of the website-driven disclosure.
• Even the advance notification of certain major financial media such as Dow Jones did not achieve the same level of access to the source content (the actual release) as did Goldman's previous paid wire service distribution.
•  Also, anecdotally, the first MarketWatch Clip today was at 7:40am ET vs. 7:37am ET for Q2 reporting.  

Again, while we do appreciate the attempt to innovate, we do hold innovation to a standard of efficacy and relevance and for that reason we've gone out of our way to raise caution about this new approach for Companies considering it. 

The analogy that comes to mind is that if we needed a document to "absolutely, positively" be somewhere the following morning, we would utilize one of the major overnight courier services, rather than to construct our own distribution channel of fast cars and fast drivers to achieve the same goal.  It just does not seem that safety or efficacy were served in this experiment, but we welcome any evidence that in fact this is a far better idea. 

The Catalyst Global Team

Goldman Sachs Q3 Reporting Headlines

as Appeared on TD Ameritrade on October 15, 2015

Goldman Sachs Q2 Reporting Headlines From July 16^th as appear today on TD Ameritrade (Release issued via a Newswire Service at 7:35 a.m. ET)

 

    Looking at other disclosure sources we find the following issues:

    

    Bloomberg.com:

    Goldman's Q3 results are not listed in the Press Release section for Goldman on Bloomberg.com - not a terrible issue given that some coverage of the results appears on the website - but not an ideal result for 1/4ly results. 

     Similarly, on TD Ameritrade when searching on press releases, Goldman's Q3 results are nowhere to be found - again not a desirable outcome. 

    Reuters.com:

    Goldman's Q3 results are discussed in a news item on Reuters but the full text of the results is not available on Reuters news page for Goldman. 

    Zacks.com:

    Here's the news item attributed to Zacks but we don't believe was issued until after the release was posted to the website around 7:34 or 7:35 - it's time stamp of 7:06 am therefore appears to be incorrect.  While not a major issue, it does raise a question as to the accuracy and reliability of data that gets reported and then consumed by investors.