What if I could introduce you to 75% of your next buyers?

Since we first published this article, we have had to correct some original data. 56%, not 63%, of the source of buying volume over the prior three months had come from existing shareholders. The article has been edited accordingly, and you can read about our more comprehensive analysis here, which shows that the source of buy pressure has predominantly come from existing or past shareholders since at least FY19.

Imagine a room full of investors. It is a big room. Hundreds of people in the room, with you standing up front, on a podium, presenting to them.

These people represent the majority of buyers of your stock.

In fact - they will buy 75% of all your shares traded in the next 3 months.

But you only have 20 minutes so what would you say?

What if I told you I could put you in a room like this? A virtual room, but one where everyone in the room knows you, knows your stock, and the people there will be responsible for $0.80 of every $1 bought on market over the next three months?

Where do you think these people will come from?

Before I dive into this, some context:

I spend my time talking with 10-20 listed leaders a week: reviewing trends, insights, and data to find keys, tools, and frameworks that can help you be more effective in your role. I then turn those insights into a weekly email.

I’ve done this for two years now, and written well over 70,000 words about it.

In addition to this, I also now have data from 130+ listed companies. This data ranges from registry insights such as trading behaviour and broker performance through to market engagement insights such as media effectiveness and shareholder engagement trends.

Mostly, the data has been affirming to what most listed leaders believe, for example:

1. Shareholders that sell down have an 80% chance to close their position quickly.
2. Shareholders with an email address are 3x more likely to invest again.
3. 44% of new shares issues in a placement are sold within three months.

But this week, the team confirmed something that completely contradicts the belief of most listed leaders.

You see, in just about every conversation I have with a company, they want to get in front of new holders. “New holders,” the saying goes, “are the path to (1) more buying and (2) a higher share price.”

Well. I’m here today to say that, at least in recent times, that is statistically incorrect.

Over the last three months, across all of our clients, 79% of all stock purchases were from existing names:

• 56% were existing shareholders buying more stock.
• 19% was old shareholders coming back on the register.
• 25% was stock bought by brand new holders.

We know this because for the majority of our clients we have all of the trading history. So rather than just a "point in time" view of your register, we have a longitudinal view and know if they are (1) a current holder buying more, (2) an old holder buying back in or (3) a new holder to the register.

What does this mean?

Well, to come back to that mythical “room of buyers” I mentioned at the start - you likely already know 75% of the people standing in that room.

You have their names and contact details in a database. So the paradigm shifts, then: instead of focusing on the top of the investor funnel, you should be focusing on the middle and bottom.

Influence over your shareholders is easier when you know who each of them are, where they trade, how much they own, whether they are in profit or loss, whether they are HNW, mid-register, or retail, and where they are based.

All of this data is in your registry data, and you can verify it yourself.

I have done it manually dozens of times. It is a pain in the a*** but it is there.

And once you have it, then it feels like you have superpowers: your job becomes infinitely easier because you know who your next buyers are, how to engage them, if they are in the black or the red, where they live, and which broker they are with.

So - do the work once, put in the time and analyse this data.

Or, if you want things to be even simpler, if your registry is (1) Link, (2) Automic (3) Boardroom or (4) Xcend we can do this for you for free. (5) Computershare is also possible, but much more manual, and we may have to charge a small fee to make it happen for you.

Otherwise, call your registry, get a full dump of all registry data to your CFO/analyst, and start putting together the tables and lookups.

It is a bit of work to do manually, but is worth it when it will give you access to 75% of your next on-market buyers! When you’ve done that, you can re-read Rhori’s email from last week for tips on how to build loyalty and conviction amongst your existing holders.