Use market volatility to your advantage, say IROs at IR Magazine Forum – TMT
The technology, media and telecoms (TMT) sector has been on the receiving end of significant volatility over the last nine months amid a swirl of macroeconomic risks.
But when your stock is under pressure, that may be the best time to get out there and increase your marketing activities, said Asana’s head of IR Catherine Buan, who was speaking at the inaugural IR Magazine Forum – TMT.
The forum is the first in a series of virtual, sector-specific conferences taking place in 2022. Future events will cover healthcare, financials & real estate, industrials, energy, extractives & utilities, and consumer goods.
Avoid passive stance
‘When you're heavily impacted by macro factors, it can be very seductive to… fall into a little bit of a passive stance, because it is true that we can't control the macro environment – we're observers of it,’ said Buan.
‘But for investor relations, I would say that these are the times when we can add the most value. When valuations are more conservative, there is more opportunity to market the stock to a group of investors that fit the criteria your product is best suited for. So, in this environment, you should be marketing as much or more than ever – whether it's meetings, one-on-one calls or conferences – because people are looking for new ideas.
‘And then from a content standpoint, [make] sure that you're telling a very clear story about what the steady state of the business will be when we get out of some of these shorter-term or medium-term factors.’
Focus on profitability
Daniel Amir, head of investor relations at global software company ironSource, also offered advice on managing extreme volatility, drawing on his experience of working in the capital markets during the dotcom bubble and financial crisis of 2008.
‘We definitely have been part of the volatility that we've seen in the market in the past six-to-nine months. Part of this volatility has been related to the fact that we're in that high-growth software category,’ he said.
‘But if there's one thing that I've learned throughout my career… it’s that you really have to try to stay the course and focus on the fundamentals, and try to ride out some of the volatility.
‘There are things that are part of your control and things that are not, and what's in your control is really trying to focus on the business. And be sure you get that right, with an increasing focus on profitability, because I think that investors in this type of market care more about profitability than they did six or nine months ago.’
Choose your UN SDGs
Turning to the topic of ESG, the forum heard from Chip Newcom, director of IR and sustainability at Equinix, who discussed how to address climate across the value chain.
‘Think about what is most material to your business. In the case of our business, we know that power is very material, and people are very material. So that's really where our focus has been,’ he said.
‘But as you look across the UN Sustainable Development Goals (SDGs), there's going to be a variety of different potential focuses across the tech sector. So think about what for your individual organization makes sense for you, and then go after and prosecute that opportunity.
‘Because what we have found is, by really focusing in on a couple of specific SDGs, that is really going to inform you and enable you to become a leader at whatever your focus area is.’
To find out more about the IR Magazine Forum – TMT or access a replay of the event, please click here.