Since 2005, more than 12,000 companies have delisted in Europe, leaving markets more concentrated and competition for investor attention more intense. As a result, investor relations has become increasingly strategic, and a seemingly minor issue can turn into a value trap or knock a carefully built equity story off course. This article explores the eight most common challenges listed companies face, drawing on Accellency’s investor relations and capital markets expertise across more than 200 mandates.
- 1How do you avoid errors in an earnings release?
- 2How should a listed company communicate bad news to investors?
- 3When should a company release its results?
- 4What should an earnings release focus on?
- 5Should listed companies meet hedge funds?
- 6Is sponsored research worth paying for?
- 7Do you need a capital markets day?
- 8Should you complain about your share price?
“In investor relations, the stakes are high and the margin of error is thin. Effective and concise communication of corporate strategies is critical to market perception and valuation.”
“With stock market concentration at an all-time high, a passive investor relations strategy is not an option. Seizing the opportunities to promote your equity story while navigating the risks in listed markets has raised the stakes for management teams and IR professionals.”
The 8 IR challenges, and how to handle them
1How do you avoid errors in an earnings release?
The best way to avoid errors in an earnings release is to build checks into the process, because time pressure makes mistakes more likely. When Lyft published its Q4 2023 results, the release guided the market to a 500bps margin expansion instead of 50bps, the share price jumped sharply on that single extra zero, and the company had to issue a high-profile correction. In Accellency’s experience, three practices reduce the risk. Finalise all documents at least three days before release. Put any figure that could still change in brackets, so the riskiest numbers are easy to spot. Finally, have someone review everything with fresh eyes before publication. Don’t become famous for a typo.
2How should a listed company communicate bad news to investors?
A listed company should communicate bad news openly and early, paired with an action plan. Most people prefer to receive bad news first, which is the opposite of how companies instinctively deliver it. Being upfront about disappointing news and explaining what is being done to fix it in the short and long term protects credibility and keeps the company in control of the narrative.
3When should a company release its results?
A company should time its results release to hold the market’s attention and avoid clashes with peers, industry conferences, bank holidays and large-cap reporting in the same sector. Companies also need to understand their position in the calendar versus peers. Releasing first means your results act as a read-across for the whole subsector, so expect questions about the operating environment. Releasing later means peers have already set expectations, so any gap between your results and theirs will be attributed to your company rather than the market. Neither slot is inherently better. What matters is understanding the different contexts.
4What should an earnings release focus on?
An earnings release should balance past, present and future, rather than dwelling on backward-looking numbers. The published results are the past and the share price reflects the future, so the presentation and commentary are the bridge between them. Slides should focus on the key highlights, leaving the detail for the appendix and pivoting attention to the equity story, upcoming milestones and growth catalysts.
5Should listed companies meet hedge funds?
Listed companies should meet hedge funds rather than dismiss them as too short-term. Hedge funds are a significant part of the investment landscape. They bring liquidity to a stock and are usually extremely well-informed and engaged in company meetings. Accellency advises doing the same due diligence on their focus and strategy as for any long-only investor, while keeping an open mind, since a hedge fund could become a major shareholder.
6Is sponsored research worth paying for?
Sponsored research, also known as issuer-paid research, is worth paying for when it fills a genuine coverage gap. This is common for small and mid-caps, as European research coverage has declined since MiFID II. For roughly €30k to €50k a year, it provides published financial forecasts from an equity analyst. However, it may be seen as less independent and lacks the distribution reach of the global banks. Regulators have broadly supported it. France has introduced a code of conduct, and Rachel Kent’s Investment Research Review recommended the UK do the same. One provider adds real value, but the benefits fall with each additional one while the costs multiply. And it never replaces the company’s own narrative.
7Do you need a capital markets day?
A company should hold a capital markets day (CMD) when it has a compelling message to deliver and the resources to execute it well. A CMD allows management to set its own agenda outside the results cycle and to focus investors on the core of the equity story, the company’s market dynamics and its long-term growth drivers. In Accellency’s experience, a successful CMD requires meticulous preparation, and it is better to postpone than to hold an underwhelming event. Hybrid formats add a further layer of complexity, as they require specific techniques to engage both in-person and virtual audiences.
8Should you complain about your share price?
Complaining about your share price backfires because investors already know the valuation and a careless comment can quickly make headlines. Acting on it sends a far stronger signal. When Standard Chartered CEO Bill Winters presented the bank’s full-year results in February 2024, he called the share price “crap”, and the quote was repeated across the press. Stronger signals than words include capital markets interventions such as buybacks or management share purchases, though a buyback is a serious capital-allocation decision, not just a signalling tool. More fundamentally, a company can revisit its equity story to close the gap between market perception and the reality of its growth potential.
