1. PowerPoint Slides for Instructors
Corporate Communication
5th Edition
Paul A. Argenti
PowerPoint Slides for Instructors
McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved

2. Chapter 8 Investor Relations
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3. Definition of Investor Relations
The National Investor Relations Institute defines Investor Relations as:
“A strategic management responsibility that integrates finance, communication, marketing and securities law compliance to enable the most effective two-way communication between a company, the financial community, and other constituencies, which ultimately contributes to a company’s securities achieving fair valuation.”
Source: National Investor Relations Institute, NIRI Corporate Website – accessed August, 2007.
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4. Objectives of Investor Relations
The main goal of IR is to position the company to compete effectively for investors’ capital
To achieve this, IR focuses on the following objectives:
Explain the company’s vision, strategy, and potential to investors and “intermediary constituencies” such as analysts and the media
Ensure that the expectations of the company’s stock price are appropriate for its earnings prospects, industry outlook, and the economy
Reduce stock price volatility
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5. IR Has Many Responsibilities
IR is responsible for a wide variety of investor activities, some regularly scheduled and others that arise on an as-needed basis
Regularly scheduled activities include:
Marketing the Brand to Investors
Annual Report
Investor Meetings/Conferences
Internal Valuation Models
Quarterly Reports & Conference Calls
Maintenance of Website
Event-driven activities include:
Investor Targeting
Crisis Communications
Merger & Acquisition Issues
Cross Border IR
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6. Nike’s Investor Relations Website
Links to company and investor information are accessible and simple
Ability for investors to customize their own page based on the info they want to see
Strong use of Nike’s branding reinforces the brand image with investors
Use of videos allows investors to get a better sense of senior management
Recent updates are clearly highlighted
Investor press releases are easy to access and up-to-date
Real-time stock quote
Source: Nike Corporate Website, accessed August, 2007.
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7. IR Directly Impacts Stock Price
Corporate Investor Relations activity could account for as much as a 25% variance in a company’s stock price, according to a recent study
Study surveyed 243 buy-side investment professionals from leading mutual funds, pension funds and insurance firms
82% believe good investor relations affects a company’s valuation
“Superb” IR is associated with creating a median stock price premium of 10%
“Poor” IR is associated with a median stock price discount of 15%
Source: Holmes Report, “Investment Professionals Believe Communications Adds -or Subtracts- Value,” July, 2007.
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8. Investor Relations Framework
Company’s IR Strategy
Investors
Institutional Investors
Individual Investors
Intermediaries
Financial Analysts
Financial & Mainstream Media
Industry Groups
Stock Price
Cost of Capital
Volatility
Reputation
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