To Release or Not To Release? That is the Question…

Will positive corporate news change your stock story? That depends. If it hits the wires on, before or after a thermonuclear market meltdown, your stock price could rise or fall for no apparent reason other than market volatility. News today contagiously spills over across domains, influencing the general mood of investors and the market. That’s why media exposure may not always benefit a small cap stock.

While press releases are the only tool for disseminating material news to the market, regulators have been cracking down on misleading information and demanding more granularity. This is helpful in terms of good disclosure and can guide content when it comes to tangible and intangible assets. A greater level of detail is also more useful to investors who can incorporate the information into their valuation models for a business. Save the soft news for an omnibus release that covers several topics, prioritizing events by business impact (i.e., likely revenue to be earned).   

More than ever though, CEOs and IROs need to be more deliberate and strategic in their communications while being careful not to come across as opportunistic or tone-deaf. So, what qualifies as a news that should go into a release?

Filter through the 5Ws and 1H used by journalists to decide:

·         Who is involved?

·         What is the event or news?

·         Where will it take place?

·         When will it happen?

·         Why is it important?

·         How does it impact the business?

If it passes muster: 1) keep it simple (KISS) – compelling brevity is key, 2) avoid industry jargon – make sure a layman can understand the importance and the financial impact to the business. 

The market values profitability more than future earnings right now. If you have it, flaunt it. If you don’t, tread carefully.