weekend reading

Weekend Reading

We survived another political convention season, my friends. High fives all around.

You may be shocked to hear that there has been plenty of news cycle beyond the U.S. presidential race with Q2 earnings, economic reports (hello July nonfarm payrolls!), and a new all-time high for the S&P500. So much for that old saying about “sell in May.”

As we head into the weekend, here’s a quick round-up of some of the news that caught our attention. Consider it our gift to you to keep you entertained and informed during your evening commute (for my train/subway riders), Friday afternoon wind-down (wine-down?) or over your weekend morning coffee. Cheers.

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Companies Routinely Steer Analysts to Deliver Earnings Surprises (Wall Street Journal)

We received a LOT of calls and emails over this article.

Audacia takeaway: Investor Relations is about making sure that there is transparency in company communications with investors and analysts. Ensuring that investors and analysts are well aware of public information is a legitimate and very appropriate activity. Analysts, like all of us, are awash in news and data. Many sell-side analysts cover upwards of 20 companies; buy side analysts may cover hundreds of companies. It is critical that companies ensure that their public messages are heard and comprehended so that they can be fairly valued.

That said, investor relations professionals (IROs) operate within SEC regulations called Regulation Fair Disclosure. There are legal ramifications for those companies who do not operate within those regulations (see: Office Depot). Additionally, investor relations professionals should encourage their employers to have a well-documented quiet period policy and stick to it.

We are always happy to discuss disclosure strategy. If you or your organization has questions, drop us a line, a tweet, or give a call. We’ve got your back.

Daily Report: Venture Capital’s Endangered Middle Class (New York Times)

Two weeks ago, we highlighted Entrepreneur.com’s report that venture capital placements are up 20.5% over Q1’16. This week, we are looking at venture capital fundraising. Per the New York Times, “In the first half of the year…just five venture firms raised $7.4 billion, or about one-third of the $22.9 billion raised over all by V.C.s.”

What could this mean? Well, it could mean that with a significant concentration of funds in a few firms we could see more concentrated placements, potentially leaving mid-sized funds and companies at a disadvantage.

Audacia Takeaway: Lots of game left to play here but it’s worth keeping an eye on… and it may open a unique business opportunity for those willing to step into the void.

Regulators Ask Big Banks to Give More Details About Trading Activity (Wall Street Journal)

In this era of high-frequency trading and dark pools, it is interesting to see that the SEC may request that big banks report trading revenue by product line (e.g., bonds, stocks, commodities, etc.). Today, trading revenues are reported en masse with little transparency into what might be driving a bank’s trading results.

Audacia Takeaway: This could be an interesting turn of events for investors by shedding light not just on what is trading but how it trades.

weekend reading

Weekend Reading

Ah summer, the season of sipping lemonade (or your libation of choice) by the side of the pool, long lazy days in hammocks and chasing the ice cream truck down the street.

Oh. Wait. It is also the season of earnings, political conventions, strategic planning, mid-year reviews and flights delayed by thunderstorms (ORD. Always.).

For those of you, like me, who are not in your hammock with a libation but are coming into the weekend at full speed, here’s your short round-up of some of the more thought-provoking news of the week. Feel free to peruse these links over your Saturday morning coffee or, you know, that hammock libation. Cheers.

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C.E.O.s Meet in Secret Over the Sorry State of Public Companies (NYTimes)

When Warren Buffett speaks the world listens. And when Warren Buffett, Mary Barra, Larry Fink and ten additional leading public company CEOs, investors, and fund managers sign their name to a set of “Commonsense Corporate Governance Principles” it’s time to sit down and think seriously about the current state of public companies. The group came together to advocate that public companies take a “long-term approach to management and governance of their business.”

Read the open letter and full set of governance principles here

Audacia Takeaway: There is hope for those of us who really do appreciate -and yearn- for more common sense in the world of governance. It’s time to stop being too “fancy” with our governance and our messaging. Real talk works.

There is a lot to like in this manifesto. Here’s one of my favorite comments in the Commonsense Principles of Corporate Governance

A company should not feel obligated to provide earnings guidance – and should determine whether providing earnings guidance for the company’s shareholders does more harm than good. If a company does provide earnings guidance, the company should be realistic and avoid inflated projections. Making short-term decisions to beat guidance (or any performance benchmark) is likely to be value destructive in the long run

Venture Capital Investments Rebound for Tech Startups (Entrepreneur.com)

As the public markets go, so goes venture capital apparently. Entrepreneur.com is reporting that venture capital placements are up 20.5% over Q116. But it’s not all fun and buzz, valuations are down 30-50% from last year and VCs are getting more selective.

Audacia Takeaway: Differentiation and relevance still matter.

My favorite comment from the article

“We are being more selective,” said Erik Gordon, professor at the University of Michigan Ross School of Business and faculty adviser to the university’s venture capital fund. “We’re not going to invest in everything that says ‘We are the Uber of X’ or ‘the Facebook of Y.'”

How Market Strategists Got 2016 Right and Wrong at the Same Time (Bloomberg.com)

Once again proving that the investment crystal ball more often acts like a Magic 8 Ball, “Reply hazy try again.”

In a year that has brought us Brexit, lone-wolf terror attacks, attempted military coups and a U.S. presidential election, economic forecasting is even more difficult than usual.

Audacia Takeaway: Refer back to our first set of news stories today. Run the business for the long term.

My favorite comment from the article

“We are in a world where you’re going to fixed income to get your capital appreciation, and you’re going to equities to get your yield,” said Bhanu Baweja, the London-based head of emerging-market cross-asset strategy at UBS. “It’s an upside-down world.”

Welcome to Audacia Strategies

And so it begins…

Hi there, I’m Katy. Welcome to the Audacia Strategies blog. I think you’re going to like it here.

A quick note about us, Audacia Strategies delivers investor relations and corporate communications to businesses that are in transformation. Transformation isn’t for the faint of heart – you want to do it right the first time. We help you get the most bang for your transformation buck by communicating effectively and completely across your stakeholders. You can learn more about what we do over on our Services page.

But this blog isn’t about Audacia Strategies. We have a whole website for that! Over in this corner of the world I’ll be talking about some of the latest “ripped from the headlines” examples of companies in transformation, providing some Investor Relations/Corporate Communications 101, and interviewing folks who have been in the trenches through big transformations and lived to tell the tale.

Most importantly, this blog is about you. I’m looking forward to hearing your perspectives, challenges and successes. I hope you’ll comment on the posts, ask questions, make suggestions, and drop me line at katy@audaciastrategies.com or tweet at me @KatyHerr. Conversations are much more fun than monologues, right?

I’m looking forward to getting to know you. Let’s talk.

 

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