Begin with your existing shareholder base
All targeting programs must start with a thorough understanding of the current shareholder base. From there, companies can decide what long-term goals they would like to set. What’s more, existing holders are one of the best targets for bringing in investment. It is much easier to convince current shareholders that are already familiar with the business to increase their stake than it is to get prospective investors to initiate a new position.
Chip Newcom, director of IR at global data center provider Equinix, says that when he thinks about targeting, the first area of focus is regular communication with the top 25-40 shareholders. ‘The best way to continue to drive value for them is to understand what they care about,’ he says. ‘We proactively reach out to them on a quarterly basis to see whether they have any questions.’
Newcom, whose company won best IR in the real estate sector at the IR Magazine Awards – US 2022, then looks at which existing investors are overweight or underweight the stock. As a real estate company, one of Equinix’s reference points is the MSCI US REIT Index. ‘That informs us of what kind of conversation to have,’ Newcom says. ‘If the investor is already overweight, we think about what concerns might flip it to be equal or underweight. If it is underweight, we think about what might make it bearish on us relative to other stocks in the index.’
Chip Newcom, Equinix
