The software company has taken a fresh approach to corporate access, being responsive and handling its IPO
When Luxoft was shortlisted for the people’s choice award for innovation at this year’s IR Magazine Awards – US, Alina Plaia, Luxoft’s vice president of IR and communications, felt it was recognition for years of hard work.
Plaia joined the company in 2011, having spent most of her prior career in investment banking and equity sales. This gave her exposure to plenty of IROs and the experience gave her a list of ideas about how she would approach IR differently.
‘I was exposed to companies of all different sizes – from mega caps to micro caps,’ Plaia says, speaking to IR Magazine. ‘Having done that for 10 years, I had a lot of notes about how I would do things differently.’
In this article, Plaia outlines how her experience has informed her approach to corporate access, responsiveness, transparency, and why it’s important for IROs not to shy away from communication during challenging times.
As an investment banker, Plaia had worked closely with Luxoft’s parent company, IBS Group, in Europe. In 2009, she started her own IR consultancy and was approached by IBS Group’s management to explore taking Luxoft public.
‘I said we should do some roadshows and see how the market would react,’ she says. ‘While we were preparing the necessary paperwork for an IPO, I was taking the president out on several roadshows across the US and Europe.’
This gave Luxoft’s management exposure to investors early. Through this access, they received feedback and were able to return months later and show how they had responded. Plaia says that this really helped in the lead up to Luxoft’s IPO. ‘When we selected bankers and filed for our desire to go public, most investors who we had met had known our CEO for three or four years. They had a history of him promising something and executing on it.’
Plaia also managed the roadshow schedule and decided who her management went to see, using her knowledge of the landscape from her investment banking days. This also helped her to brief management on how to tailor their pitch. ‘All investors are different,’ she says. ‘Knowing which buttons to push during 30 minutes is so crucial, but often the sell-side advisors and bankers don’t bring enough information, they just shove you in front of people. I want to know what the investor is living and breathing and what the buzzwords are.’
Plaia was offered the opportunity to head up Luxoft’s IR department full time in 2011 and the company went on to list with the NYSE in 2013.
Refreshing FAQs and being available
Plaia’s IR philosophy is to never hide, to constantly be available and to frequently communicate with investors. One way the Luxoft IR team does this is by refreshing it’s FAQs on a quarterly, or sometimes monthly, basis. This means that they can respond to topical issues that may affect the company. ‘Right now we’re getting a lot of questions about how H1B visa changes and border taxes changes [under the Trump administration] would affect us, so we have updated our FAQs,’ Plaia explains.
In addition, Plaia estimates that she answers 150-200 queries per month, on average. Her team encourages investors to send in questions throughout the year. They then produce a briefing sheet for Plaia, who will then call the investor and talk through the answers. ‘During the quiet periods, we’re equally as available to people,’ she says. ‘A lot of people do their homework in advance of earnings, so we’re really responsive. Somehow we manage to cover 150-200 calls per month and we’ve been doing that now for three years.’
Being proactive during challenging times
A couple of years ago, Luxoft knew that they would be issuing an earnings statement that was less positive than previous quarters. They had been focused on working with their top three clients, which was a long-term play that wasn’t yielding much short-term growth.
Then Plaia noticed that some hedge funds were beginning to play with the stock. ‘People were betting and shorting and borrowing,’ she says. ‘Before we announced our results for the year and our guidance, I reduced our marketing and hit the road to increase the conversation with the people who had been with us since our IPO.’
Plaia explained the company’s strategy and long-term focus. She says that this proactive approach helped steady the stock. ‘In six months, the stock got concentrated within the top 20 accounts. Liquidity is almost nil, so hedge funds can no longer play with our stock. As a small company with a manageable investor base, managing who is putting their hands on your stock is so fundamental.’