It was 1995 when Smith-Midland went public, and the stock price stayed between $5 and $6 for the first year before it took a nosedive to $1 to $2 and fluctuated in this range for 2 decades. However, 2016 saw a rapid increase in Smith-Midland’s value, and the stock price has skyrocketed to $7 to $8. This displayed a need to take investor relations serious as the management staff will want to retain their high level of confidence in the company as they have shown in the past couple of years.
Similar to many companies, there was neither professional in the field of investor relations, nor any budget earmarked for it. In 2018, AJ Krick took on the role of Chief Financial Officer of the company. He took an unprecedented decision to set aside $100,000 for managing investor relations, which was outnumbered by the usual amount of small caps’ investment in this attribute. However, the story of Smith-Midland proves to us that the proper management of investor relations does not necessarily cost you an arm and a leg.
Krick has his objective clear: to inform investors about the values of the company. He started out by promoting the company’s history, their current business as well as long-term development. However, after several rounds of discussions with investors, Krick realized that what investors are eager to know are who is steering the wheel of the company, which means the company will need to disclose its composition of management, the seniors’ vision of the company, and financial details such as earning and expenditure, so as to appeal to investors. By keeping a close eye on the reports of his company’s competitor, Krick understood how their financial reports are structured. Krick also listened to the financial analysts’ comments on different companies to improve his own company’s management of investor relations.
To small caps, investor relation is an indispensable part for them to understand what investors actually care about, and the company should seriously devise a proper way to disclose relevant information. The key to success is to engage the management staff in the dialogue with investors, to get across what values the company can create to the shareholders, and to gain their trust.