IPO Credibility
Credibility is Key
According to the paper Investor Psychology in the Capital Markets (Daniel, Hirshleifer, Teoh, 2001) individuals (investors) “remain subject to the biases and self-interest they exhibit in private settings”. This presents an opportunity for those management teams who choose to prepare themselves to maximize their time with investors during an IPO roadshow.
We are instrumental in helping issuers to enhance and convey both management and brand credibility in a transaction environment.
Credibility, ahead of business strategy and even tangible metrics (EPS growth and cash flow, to name two), is by far the leading factor buy-side investors consider when evaluating whether to buy a common stock (October 2005, NIRI IR Update).
When communicating with institutional investors, imparting credibility and confidence is essential. Investors must believe you have:
1) The requisite amount of credibility, and
2) An adequate level of confidence that your management team will execute on its plans for growth.
You will require the same belief in you and your team. Rigorous preparation, guided by the industry’s most experienced professionals remains the most effective way to acquire credibility and confidence.
We are also experts at planning and executing Investor Days for medium and large publicly-traded companies.
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