Investor Days are expensive, they are a heavy lift in terms of time, and depending on the date, it’s tough to get investors to show up, stay, and stay off their phones. Here’s why we still believe it is the single best way to form and communicate your company’s long-term message and address valuation gaps.
Investor Days allow your firm to present the most unobstructed and unedited presentation of your “story” to the public and the investment community. Unlike other types of third-party “investment analysis” options, hosting an Investor Day event gives your company an opportunity to control your story.
That being said, mounting an Investor Day event requires time, planning, and financial resources to do it right. Yes, this type of event is not cheap to pull off. But the benefits of mounting a successful Investor Day event could reap innumerable rewards.
Investor Days Are Now Mandatory
Investor Days have historically been optional but now investors view them as a must have, particularly for companies that have an evolving story or deep management bench. Investors now demand more direct access to the top corporate leaders. Also, investors want to see detailed, long-term strategic projections, not just short-term sound bites. They like getting into the weeds of how a company performs under pressure and how it adjusts to the ever-changing winds of global competition. Sponsoring Investor Days allows you to tell your company’s story…your way.
Reasons for Holding an Investor Day Event
The team at Clermont Partners believes that there are many significant and compelling reasons for hosting an Investor Day event, including:
- Time-efficient: Investor Days are a time-efficient way to reach current and prospective shareholders and analysts. They offer a perfect antidote to broad-based shareholder engagement and help to ward off shareholder activists, who tend to divide and conquer, who often have individual conversations with larger investors to communicate their viewpoints on a perceived weak strategic plan.
- Communicate a Broader Story: Investor Days create an opportunity to communicate a shift in strategy, unveil longer-term targets, and give exposure to broader management initiatives. This is often difficult to communicate through shallow or incorrect sell-side reports that often focus on the short-term versus the company’s longer-term story.
- Frame the Trends: Investor Days also allow the Company to frame the potential impacts of megatrends – either to convince investors of the growth potential, or to defend why the megatrends will have much less of an impact on the Company’s growth than investors may think.
- Outline Performance through a Cycle: These events can provide the opportunity to communicate to investors how your company will perform more effectively through turbulent business cycles and multiple economic environments.
Creating a Solid Foundation for Your Investor Day
It goes without saying that before outlining the framework for your Investor Day, you should understand what investors are thinking and what they are concerned about. First, to learn more about what current and potential investors are thinking, conduct a perception study. Second, engage a round-table discussion with your internal teams to develop more laser-precise messaging for the event.
Armed with the data from the study and the roundtables, you can begin building your Investor Day roadmap. This roadmap should reflect the CEO’s vision for the company’s future, and the new strategies utilized to fulfill them. Another component that adds credibility to this new vision is adding quotes from various company division leaders, discussing the new improvements to the company’s day-to-day operations in specific detail.
Blueprint for a Better Investor Day
If you’re looking for a blueprint for a successful Investor Day, Clermont Partners has compiled a checklist of common-sense components to make that day more successful.
- What’s the frequency? – The general rule for how often to host an Investor Day event is every 18 to 24 months. If you have nothing new to say (again, acquisitions, marketplace, or operational goals), don’t try to make a mountain out of a molehill, marketing wise.
- Laying the proper foundation – If you have new programs that might be attractive to new investors or to warm leads that you’ve already been working for a while, insert those new initiatives into your overall Investor Day presentation.
- Give up short-term thinking – Investors want to know about your firm’s long-term strategies. Highlight your company’s long-term targets (acquisitions, marketplace, or operational goals) and focus on the areas of your business that will move the needle, typically within the next three-to-five years.
- Correct the record and control the narrative – Investor Day events are a great way to correct unfavorable investor perception while allowing you to better control and mold a positive/negative spin. Get in front of the story, rumors or misunderstandings that ultimately compress valuation.
- Strategic operational updates are good – If your company has made a recent corporate acquisition, divestiture, or management change, talk it up. Emphasize how the strategic shift fits into the overall strategies that your company has been touting over past Investor Day events.
There is no doubt that investor days will evolve. Maybe ultimately, they will be virtual – watched on a high-quality webcast with a live Q&A session. Possibly including virtual reality from a manufacturing plant for a tour. But, one thing we do know – Investor Days will continue to happen because they add value for investors and analysts.