Chapter Five

Investor Relations

The major measurments are dollar sales volume, profit, the increase or decrease in interest or dividends paid, and whether the price of the stock or bond has increased or decreased from the original purchase price. Other factors include the rank of the company among competitors in its field and what percentage of dividends is paid in comparison with the purchase price.

All practitioners need to to be familiar with the economic climate and its impact on the organizations they represent - corporate, governmental, or non-profit.

Companies take on the personalities by those who manage them (i.e. greedy, self-serving, competitive)

In order to get started, there must be capital or credit or a product or service that a market is perceived or waiting to be created. Survival comes first and then its growth, diversification, and expansion make up goals that fuel ambitions and drive all participants on the payroll. Profit makes everything else possible. (that is what ever is left once all bills are paid)

Laws were enacted allowing for the formation of corporations, business entities in which stakeholders risk only the amount of their investment, because the situation discouraged the formation of new business. Before this, the business owner had no "corporate shield" and if failed at the business had to pay all debt back, including personal bankruptcy.

The role of the corporate financial relations specialist or consultant tends to be that of interpreter and mediator between the prime audiences. He or she usually comes on as a moderate or neutral in economic and political philosophy. The position requires skill and objectivity in representing the average investor, the middle-class unsophisticated citizen, while representing private enterprise and conservative views publicly.

The financial public relations role can be summarized as:

• Communications strategy appropriate to management goals in investor relations
• Preparation of public literature, including reports required by law and establishing press contacts
• Managing relationships with the financial community, including analyst meetings, tours or visits, and so on

Example

Enron Scandel - They hid that they were in debt due to a lot of failed deals and managed to keep it under wraps until the end where they laid off thousands of employees and filed for bankruptcy and shut down. Investors lost a sum of money that was in the billions when the stock plumeted to under a dollar.