In late March, I wonder what odds you could have got on Apple’s valuation topping $2 tn by the end of the year? Or on the S&P 500 bouncing back to the extent that it has? Or Tesla's valuation in August being higher than Goldman Sachs, ExxonMobil, General Motors and General Electric combined?
It’s unlikely many people placed any of those bets, but millions of new retail investors created brokerage accounts and bought in at the dip. For some of these first-time investors, it was an opportunity to buy shares in companies they previously didn’t think they could afford – Alphabet, Apple, Disney, Facebook and more – but for others it was an opportunity to try out day trading.
In most cases, this activity hasn’t moved stock prices but it has driven volatility and left some feeling that retail investors are inflating a stock market bubble. In our lead feature, we look at retail investor behavior and how IR teams can manage communications with an investor base that doesn’t get much attention.
Elsewhere in this issue, we take a look at the outlook for M&A activity in 2021. While many large-cap tech stocks have recovered or exceeded their pre-pandemic valuation, there are more companies that have yet to recover their value. In some cases, these companies may become targets for acquisitions, and Tim Human looks at the crucial role IR teams play during a large transaction.
And on the subject of transactions, there are now many different routes to access the public markets. This year everyone’s talking about special purpose acquisition companies; two years ago, it was direct listings. Laurie Havelock dives into the reasons why companies would select these routes as alternatives to a traditional IPO.
Finally, as we discussed in the summer issue of IR Magazine, the Covid-19 outbreak has brought ESG issues to the fore – most notably as companies have had to address human capital management and racial equality concerns. In this issue, we talk to a member of BlackRock’s stewardship team about the firm’s ESG priorities and publish a thoughtful examination from State Street Associates about whether lending shares to short-sellers is at odds with long-term investing goals.
I hope you enjoy reading. As ever, please do get in touch with questions, comments or suggestions.
Ben Ashwell, editor IR Magazine