IR Monitor – 22 January 2025

In this week’s newsletter:

• Maximising shareholder value by combining IR with corporate communications:  IR Magazine makes the case for this and also for IR reporting directly to the CEO  
• The IPO hopefuls that could revive London. After disappointment in 2024, the FT has identified the financial services, industrials & consumer names that could debut this year 
• Activist investors forced record number of CEOs to resign in 2024 reveals Forbes
• Wall Street Journal: Pre-eminent short seller is calling it quits. Hindenburg Research founder Nate Anderson, a foe of Carl Icahn and the Adani family, cites job stress
• A fresh rush of deals is receiving an uncommonly warm welcome from institutional investors trusting acquisitive bosses to create value. But Reuters Breakingviews has a warning for Chief Executive Officers: enjoy the M&A fervour while it lasts 
• And finally … Looking for an Investor Relations job in the Middle East? The Kingdom of Saudi Arabia accounted for 42 of the 53 IPOs in the region in 2024, according to Arab News. But the United Arab Emirates led in terms of proceeds with $6.2 billion raised 

This week’s news

Combining Investor Relations with Corporate Communications? 

Typically, the IR function of a business serves to communicate important numbers and figures to shareholders and therefore often reports directly to the CFO. However, Frederik Erlandsson, head of corporate communications and IR at NIBE Group, argues in IR Magazine that the key to generating clear shareholder value lies in the joining of forces between IR and corporate communications. By marrying them up, important numbers and messages can be delivered to the market more coherently, thereby reinforcing corporate credibility. As such, IR Magazine concludes that IROs should have responsibility over corporate comms to more effectively deliver clear messages in a word of fast-moving information. As such, this cohesive task force should report directly to the CEO as an integral arm of the business.  

IPOs that could revive London

The London stock market showed little promise and reached new lows in 2024. New listings broke records for the smallest ever fundraisers and fewer than 20 new companies listed in the UK – the lowest number since the financial crisis in 2009! As companies head to the US in search of higher valuations, hopes are withering for 2025. All the same, the Financial Times has compiled a list of potential IPOs that could be on the cards for this year, though doubt remains over whether 2025 will bring the market such a needed boom. In the fintech sector, Santander-owned payment start-up Ebury, digital lender Zopa and credit-checking platform ClearScore are credible candidates for a listing. In the broader financial services space, small business lender Shawbrook and TP ICAP’s data unit Parameta are in contention alongside consumer brands Shein and Unilever ice cream. Will 2025 deliver more than 20 new listings for London? 

Record CEO resignations triggered by activists in 2024 – Forbes

2024 saw the rise of a new trend whereby activist investors, keen on safeguarding their investments, are increasingly advocating for changes at the top management level when difficulties arise. Citing numbers prepared by Barclays, Forbes have reported that activist investors launched a record-breaking 243 global campaigns targeting corporate leadership, leading to an unprecedented number of CEO departures from companies with 27 chief executives stepping down from their positions. In this report, Elliott Management emerged as the most prominent activist investor, spearheading 14 high-profile campaigns that zeroed in on major corporations including Honeywell, Softbank, Starbucks and Texas Instruments. This pivotal shift in leadership turnover is in part driven by the necessity to keep pace with rapidly changing market conditions and meet heightened performance expectations amongst a backdrop of unprecedented business and supply chain challenges.  

Hindenburg Research calling it quits

The founder of Hindenburg Research, Nate Anderson, is closing his firm due to the toll that his job has taken on his well-being over the last eight years. Also known as the short seller who “wiped billions of dollars off the market values of companies”, Anderson is planning to share resources and training materials with the public so others can emulate his success. The level of scrutiny and risk, a decade-long bull market and the rise of multi-strategy funds have all made short sellers such as Hindenburg something of an endangered species. His company began in 2017, as part of a surge in so-called activist short sellers, and eventually built a reputation for diligent research and novel investigative techniques. Despite receiving eviction notices and being sued early on, the company survived and struck gold in 2020. In an interview with The Wall Street Journal, he admitted having “spent most of the last eight years either in a fight or preparing for the next one”. Planning to invest his money “in index funds and other low-stress investments”, an early retirement appears to be on the cards for Anderson! 

CEOs should enjoy the M&A fervour while it lasts – Reuters Breakingviews

Starting 2025 with a bang – a fresh rush of M&A activity has received a warm reception from investors. Reuters suggests that it’s only a matter of time before over-eager buyers provide a reminder of the often-destructive nature of deals. Corporate “chieftains” are worried about elevated borrowing costs and valuations alongside new economic, financial & regulatory conditions. For example, Getty Images’s $3.7bn merger with competing photography warehouse Shutterstock comes with promised cost cuts worth as much as its entire market capitalisation. Although it is using its shares as currency, which typically leads to a flurry of trading that distorts prices, they jumped 24% on the news. Whilst for Getty the return on investment is evident, many investors think that most transformational mergers are poor uses of cash. As rising optimism tempts more CEOs into the fray, more bad deals may result. Throwing caution to the wind may not be the best plan of action. 

And finally… Looking for an IR job in the Middle East? Saudi Arabia beckons

The Kingdom of Saudi Arabia accounted for 42 of the 53 IPOs in the region in 2024, earning a global ranking of seventh by IPO volume around the world. However, the United Arab Emirates led in terms of proceeds, with $6.2 billion raised according to Arab News – citing Kamco Invest’s latest report. This highlights Saudi Arabia’s dominant position in regional capital markets and its role as a key driver of IPO activity. GCC issuers collectively raised $12.9 billion in 2024, a 19.8 percent increase from $10.8 billion in 2023, despite global IPO markets elsewhere experiencing their weakest performance since 2009. Demand was driven by a supportive local investor base and this has underscored the resilience of Saudi capital markets despite challenges such as declining oil prices and geopolitical tensions. The most active sectors included health care, materials, and professional services. In 2025, Saudi Arabia is expected to further dominate, with 31 IPOs in the pipeline so far. Saudi Arabia is indeed the country to watch!