IR Monitor – 29 May 2024

In this week’s newsletter:

• Capital Markets Days: spotlight on emerging trends. Key takeaways from a cross sector survey here at FTI
• As this year’s proxy season draws to a close, defeat after defeat for activist investors in proxy fights raises the question: Are activist investors increasingly getting de-activated, losing their credibility and power?
• References to AI by executives during earnings calls have almost tripled since 1Q23 observes John Authers. CEOs plainly feel the need to talk about this and implant the idea that their companies could benefit from the technology
• The IR Society held a breakfast briefing on enhancing investor-company dialogue: your FTI correspondent attended
• Don’t cancel the UK roadshow just yet: London still Europe’s share sale capital even with few IPOs
• And finally … they tried to design the perfect sell side note

This week’s news

Capital Markets Days: spotlight on emerging trends

Capital Markets Days serve as key moments for businesses to communicate their vision, strategy, and performance to shareholders. Over the past few years, companies have been experimenting with formats to educate and engage their audience. A recent survey conducted by FTI Consulting across its financial communications practitioners sheds new light on these trends, offering insights gleaned from our experiences in attending these events and in preparing management teams ahead of them. We found that shorter, interactive events which bring all of the company’s dimensions to life are more likely to keep attendees engaged, whilst extended management and senior leaders are a welcome addition to the presenting team. From format innovations to audience engagement strategies and content development, we invite you to explore how investor events have evolved, and what a successful event looks like today. 

Are activist investors increasingly getting de-activated?

Writing for CNBC, Jeffery Sonnefeld and Steven Tian discuss whether activist investors still hold the credibility and power they once did, after a barrage of defeats for activist investors in this year’s proxy season. Sonnefeld and Tian discuss the shift in intention in the past two decades from activist investors. They argue the once “virtuous and necessary” movement in corporate governance that brought accountability and transparency amongst companies has now shifted towards “greenmailers” snapping up shares and threatening a takeover in a bid to force the company to buy back shares at a higher price. Their analysis revealed in the last five years, looking at publicly traded companies with a market cap greater than $10 billion dollars, activist investors have substantively lost every single proxy fight they initiated, leaving many commentators wondering whether there is even any point to these engagements.

References to AI by executives during earnings calls have almost tripled 

As Nvidia approached its quarterly earnings last week, John Authers at Bloomberg discussed how the company has become influential as the best pure play on the growth of artificial intelligence. The surge in interest in AI, since the launch of ChatGPT, has been significant. Looking at Bank of America analysis on AI, the mentions of AI during S&P 500 earning calls has soared 186% since 1Q23. Authers postulates that company leaders plainly feel the need to talk about AI and implant the idea that their companies could benefit from the technology. However, he wonders whether AI will help these companies build revenues and profits.

IR Society: enhancing investor-company dialogue

The IR Society held a breakfast briefing on enhancing investor-company dialogue. The briefing was hosted by Andy Griffiths of the Investor Forum whose latest thinking can be found here. The institutional side was represented by Michael Stiasny of M&G who made the point that investors want a direct relationship with the companies in which they are shareholders, whether that is a 30-year holding or a 6-month holding. And they prefer it if that relationship is not intermediated. The corporate side was represented by Douglas Radcliffe of Lloyds who made the point that dialogue should be a two-way flow not just of company announcements to investors but of investor feedback to companies. Contact the team at FTI if you are interested in a perception study.

London still Europe’s share sale capital even with few IPOs

London continues to outshine its European counterparts in share sales of listed companies, with a remarkable surge in secondary deals despite the slowdown in IPOs, as reported by The Evening Standard. Share sales in London have skyrocketed to $11.3 billion so far in 2024, marking a whopping 24% increase from last year and leaving other European exchanges trailing behind. The LSE now ranks as the fifth-largest exchange globally in terms of capital raised, closely following the NYSE, Nasdaq, and two Indian exchanges. Julia Hoggett, the LSE’s CEO, attributes the poor perception of London’s capital markets to a misleading public narrative pointing out that “there are no other European exchanges in the top 10.” Despite London’s IPO scene at its lowest in decades, with potential listings in the pipeline as exciting as Shein and Raspberry Pi, Dru Danford from Liberum suggests that London’s real rival will be New York, with companies eyeing the Big Apple for larger, juicer valuations. 

And finally … they tried to design the perfect sell side note

The team at FT Alphaville embarked on a quest to craft the ideal sellside research note, spurred by last year’s critique of the aesthetics of sellside research notes, which led to a thorough examination of fonts, colours, and layouts. By incorporating the Financial Times’ signature hues and blending fonts for both flair and legibility, they’ve created a note that is both elegant and clear. Opting for the European A4 standard over America’s perplexing paper sizes has added a further touch of sophistication. The final product features key elements such as distinct branding, in-line charts, paragraph summaries, and, hopefully, clarity. Now, they eagerly await feedback, hoping that their hot pink accents and meticulous grids, inspired by none other than Josef Mülller-Brockmann, impress their discerning readers.

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