Especially during market crashes and economic downturns

By Jeffrey Stanger

President, ITB Solutions

One thing I can’t stand is waiting at an airport for my delayed flight with no information or any announced reason for the delay. Returning from my last trip to the U.S., after arriving and checking in at the airport I was informed my flight was delayed. No estimated time of arrival (ETA).  No explanation as to the delay or when (or if) we would ever get an ETA.  I didn’t know if the plane had mechanical problems, was delayed by weather, or the crew failed to show up!

I had plans later on that night with my wife who was to be picking me up at my destination. What do I tell her?  Do I go to the lounge and wait it out, or do I have time to head back to the city and explore?  It was very frustrating.  I ended up pulling out the laptop and doing some work. Sure enough, as soon as I got into it we were notified that we could board.

I’ve experienced a similar feeling with some of the companies that I hold shares in. Naturally, this has been compounded with the market crash and the economic downturn.  However, the simple expediency of letting investors know what is happening with the company, its industry and its market is even more imperative during these dire times.

Investors need to know what’s happening.  When there is no news, people lose faith and your company’s stock may well be the first one they sell.  Your IR program should not halt or even slow, but rather it should be expanded to inform shareholders of all breaking developments, good or bad, significant or not. Otherwise, investors will make decisions based on rumours or false pretenses. It’s always a bad idea to say nothing – because investors have a tendency to fill news vacuums with imagined horrors.

So let them know of any changes, material or not.  Comment on the economy, specifically how it relates to your business and how management will react to these industry and market changes.  What are the company’s plans to keep or increase shareholder value during these turbulent times?  Show your shareholders that management is on top of things and is prepared to do what is necessary to overcome these obstacles.

Companies listed on CSE have the advantage that they are required to update shareholders through the CSE Monthly Progress reports, which are posted online.  You can view an example of CSE’s Monthly Progress reports here.   These reports inform shareholders of any changes to the company such as:

  • General overview and discussion of developments of the company in the past month.
  • General overview and discussion of the activities of management.
  • New products or services or products/services that were discontinued.
  • New business relationships or termination of any contracts.
  • New shares, options or warrants.
  • Changes in directors.

Don’t wait for your shareholders to call you, keep them informed proactively! Remember, no news is always bad news.

Since 2005 ITB Solutions has provided listings development services to stock Exchanges in Canada such as the Canadian Securities Exchange. ITB Solutions currently provides New Listing Services to the NEO Exchange. We assist companies with the listing application and managing the process to become publicly tradable in Canada, as well as offering advice on how to make the most of your public listing. You can reach Jeffrey Stanger at 647-500-0492 or by email at jeffrey@itbsolutions.ca