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I love the NFL Draft. LOVE IT. I look forward to it. I prepare for it - and not just for my beloved Cleveland Browns. I watch as much of it as I can (read: as much as Mrs. B will allow). I even read reviews of it to see how my team-by-team grades compare to the experts’.
Somewhere during the fifth round of the draft this past Saturday I had an epiphany. The reason I love the draft is that it is just like investor relations!
Just like for public companies, the numbers don’t tell the whole story for the players. Sure the tangible assets (height, weight, 40-speed) are important. But the intangibles (leadership, toughness, work ethic, production) are just as important, if not more so, when trying to determine a player’s future performance. Case in point - JaMarcus Russell and Drew Brees. On paper, the former looks like a can’t miss Fortune 500 company while the latter looks like he’s a few bad quarters - pun intended - away from being delisted. As a result, the former was the first player selected in 2007 while the latter slipped into the second round in 2001 (and now plays for his second team).
Oddly enough, you don’t play the game on paper just as you don’t invest based solely on historical results. In this example, the intangible assets of Drew Brees have made him a Super Bowl Champion while the seemingly lack of intangibles of JaMarcus Russell have already forced him out of the starting line up.
See where I’m going with this? (Don’t feel bad - neither did Mrs. B.)
I really need to get a hobby.
I’m sitting in the airport, waiting for my flight back from LaGarbage… errrr… LaGuardia… and I find myself thinking about ticker symbols. Specifically, I’m thinking about clever ticker symbols such as FUN (Cedar Fair), EAT (Brinker International), ZEUS (Olympic Steel), MMM (3M), CAR (Avis), ZINC (Horsehead) and LUV (Southwest Airlines). And then I start to think about the influence the language of texting might have on stock symbols. Seriously, shouldn’t some entertainment company use LOL. And who besides a company called Wood Treatment Fabricators of America would use WTF?
I don’t know about you, but I love when a company has clearly put some thought into its ticker symbol and create a “monogram” that really reflects the business rather than serves as a three- or four-letter abbreviation of the company’s name. Am I the only one that notices stuff like this?
Hi boys and girls! Miss me? Took the family down to the beach for a little Spring Break action so I couldn’t chat with you last week. Sorry I didn’t give you a head’s up but I didn’t want to end up on this devilish Web site.
Anyhow… I’m back in the saddle again and talking a lot of “A-B-Cs” with IPOs. In fact, last Friday, I met with two different management teams that are taking their respective companies public. The companies could not be more different - one a household name, the other a small industrial. Yet, the conversations were frighteningly similar.
Both companies wanted to talk about what they could do now to get ready for life after going public. Both companies wanted to get a better understanding as to how much new responsibilities were going to fall on their existing finance and communications staff. Both companies wanted to know if my colleague and I would actually work on their account or if we were the firm’s sales team (I suppose some firms still have professional sales teams. Frankly, I was surprised me to hear that question twice in the same day - guess my “presentation training” is paying off! LOL). Both companies wanted to know more about the role of their investment bankers after the offering. I think you get the point.
Where the conversations diverged was around the idea of IR as a marketing function AND a compliance function. Not surprisingly, the household name company understood that concept immediately (if not before the meeting even started). The industrial, on the other hand, was a bit skeptical and was much more focused on getting a compliant function in place quickly.
As we’ve discussed here before - both pieces are equally important to the investor relations function. The companies that win for their shareholders over the long term are those who realize that sooner than later.
