Selling Stock With Investor Relations
by Carolyn Kott Washburne
A veteran stock broker took aside a new trainee to give him some advice. "There is an old saying in
this business," said the veteran. "When the president of a company wants to buy you lunch, the stock is
overpriced. If he refuses to pick up the tab, buy the stock immediately."
He paused and smiled at the puzzled trainee. "What that means is that by the time a company goes on the
road to pitch its stock, there isn't much of a story there for investors. Wait until things get better."
The veteran's advice gives a clue to the nature of investor relations in U.S. businesses today. The
relationships that publicly-held companies maintain with the investment community and with individual
shareholders play an important role in how their stocks will be rated and traded. Similar to public
relations, yet much more sophisticated, a good investor-relations program can have a significant impact
on a company's image, stock price and ability to raise operating capital.
Each company's approach to investor relations varies, depending on its size and what it produces, but
there are some common elements. The person responsible for investor relations in a small company is
usually the vice president of finance, the treasurer, or public relations director; a larger company may
have a vice president or manager of investor relations who supervises a small staff. Sometimes this staff
is temporarily augmented during the proxy solicitation period prior to the annual meeting.