Treat Your Company's Stock Like Any Other Product Or Service
If you have a public company, or are anticipating taking your
company public, the subject of stock support, often ignored,
should be a critical part of your corporate planning.
It is the foundation for the success of your stock values.
This is how you will ensure that your share price is at its
highest possible level at the time a buyout or merger offer is
made for your company.
Growing Your Business
Private companies go public to grow their business. Being
a public company makes it easier to access money, the
lifeblood of business. You convert your equity to cash. It's
easier for a public company to borrow money. You can buy
corporate assets with stock. Eventually, you will sell your
public company based upon its share price and not its
balance sheet. These benefits depend upon your ability to
maintain a strong share price.
Better marketing, not better mousetraps, creates strong
share prices. To ensure that the stock is both strong and
stable, your corporate vision must become the vision of your
shareholders. You must effectively tell your story to the
Better marketing means educating the investment
community about your company and your industry. It means
developing personal relationships with your shareholders
and market makers. It means being honest about your
company and leveling with your supporters. It means
expanding the demand for your stock beyond the limits of
There are several ethical rules of corporate behaviour you
* Understate, never overstate your positives. (Enron?)
* Communicate in good times and bad. (It's vital to have a
vice president of investor relations, whose sole job is to
communicate with your shareholders and the financial
* Investor relations programs should rely on filings over
* Investor relations programs should aim to diversify the
You must develop a coherent business strategy stating
clear performance, profitability, and expansion goals. The
strategy must then be translated into an appropriate
investment message. It must target investors with similar
goals and economic objectives.
* A company that doesn't communicate effectively will
* A company should list its investor relations goals.
* A company should target its investor audience.
* An outside investor relations program should list
strategies and expected results.
* You need a story to tell.
* People do business with companies they trust. If you want
the financial community to believe you, level with them.
* Know your message.
* Doing what's right is good business.
Maintaining A Strong Share Price
You need a strong share price to buy assets without
diluting your issued stock to the point where it makes it
impossible to keep a strong share price.
If your share price bounces down, you create selling
barriers which, when you attempt to move it back up,
motivate present shareholders to dump their stock into your
Unstable share prices attract short sellers. Unstable share
prices attract regulators.
Strong share prices are essential to get your company
listed on stock exchanges in this country and elsewhere.
Strong share prices make bankers happy when they
consider lending your company money.
The list is endless. There is no advantage to having a
penny stock. There are loads of disadvantages.
Supporting Your Share Price
You must support your stock price whether you use our
private placement program, do an initial public offering or
any other public offering. My associate’s company considers
this concept so critical, for instance, that his investors
provide and fund a powerful five-year external stock support
program to bolster and extend the value of clients' insider
programs. Combined, the two programs can create a strong
marketing effort for a stock in the United States, the United
Kingdom and Europe. They will also ensure a high value at
Remember that selling the concept of owning your stock is
just as critical as selling the concept of using your product
or service. The customer list may be different, but both
represent profit potential for you and your company and a
Golden Parachute four or five years in your future.
Mr. Barnes is President & General Manager of Capital
Funds Group Ltd., a Canadian based world wide consulting
firm specializing in Putting Companies and Money
Together. They also work with non-US companies
to take them public rapidly and inexpensively, then getting
them funded. Visit our
Web Site Email
Article Source: http://EzineArticles.com/