Turning difficult investor questions into an advantage.

These can be scary to deal with as a listed leader but they're the perfect opportunity to convert an individual interaction into meaningful engagement at scale.

Hi everyone, Kevin here!

Having worked with Ben and Rhys here at InvestorHub for almost six years, I’ve had the privilege of spending a lot of time in the listed space on both sides.

I help listed leaders execute on capital raises, improve their investor communications at scale, pull insights from data and everything else that comes in between. I also spend a lot of my personal time as an investor, the individual who reaches out to public companies seeking clarity and context to better inform my research.

Most interactions between public companies, their shareholders and the broader market are relatively straightforward. If it’s a positive question, it’s answered quickly and shared publicly. 

If it’s even a little challenging, most listed leaders will either:

  1. Ignore the question entirely.
  2. Answer it privately to ‘minimise exposure’. 
  3. Provide a bland corporate response. 

I’m going to be honest with you - there are better strategies to handle these questions.

We live in an information age (and have for a while). I can guarantee that for any genuine investor question that you receive, there are dozens or even hundreds of people that are thinking the same thing. 

You are not just dealing with a single question or interaction. 

You are responding to the collective curiosity or the frustrations of many investors. It’s scary but it should also be exciting because it’s an opportunity to educate a lot of people and influence their perspectives all at once. This is a great moment to apply leverage! Answering something well, publicly, once can unlock a lot of investor cash and only takes you a little bit of time.

 Now more than ever, the market respects transparency, so there has never been a better time to front up to challenging questions and provide a well articulated response for all to see.

Here’s two detailed examples of difficult questions that were turned to their advantage to educate the market and engage more investors at scale. I’ve done an in-depth review of several more in this free guide which you can also access as part of our listed community.

Keep in mind - these might be specific use cases, in specific industries, but the same principles apply across the market.

For today’s email, let’s jump into these masterfully handled Q&A examples. 


Why is your share price performing so poorly?

Dreadnought Resources (ASX:DRE) released an announcement to provide an update around a significant resource increase at their 100% owned Mangaroon project located in Western Australia.

There’s a lot here you can take away and apply to your own investor questions.

  • Share price performance is going to be something you run into frequently and a well-articulated response like above will go a long way in building high-conviction shareholders.
  • Acknowledging that there are elements influencing share price that are simply outside of your control helps give investors perspective.
  • Highlighting all the active initiatives in place to generate organisational value helps demonstrate management-shareholder alignment.

When mixed with a healthy dose of rapport building and empathy, it's a no-brainer to see how responding publicly to a difficult investor question like this benefits many investors beyond the original interaction.

Why should I stay after losing so much money?

DigitalX (ASX:DCC) released the deck for their Share Purchase Plan as part of their latest capital raising and an investor was quick to question whether they should participate.

This is an interesting situation because of the change in leadership and deeper investor frustrations.

  • Having past shareholders return and reassess your company for a potential investment is a great opportunity to resurrect a shareholder.
  • In situations where they may have lost money and are treading cautiously, it is important to first show empathy but assert how things has changed for the better since the period of their original investment.
  • Do you have new management? Is the business operating better? Have you had new major investors join and provide validation? These are all elements to lean on and show why you're a much improve investment opportunity.

Seeing Lisa follow up with an invite to their upcoming webinar demonstrates just how willing the leadership team at DigitalX are to engage with their shareholders, and that just feels comforting if you're considering coming back.


So there you have it.

Two examples of difficult investor questions that I’ve seen turn to the company' advantage. Hopefully I’ve given you some inspiration for your own efforts going forward. 

I know it can be scary to start so I’m making myself available to help.

If you have any difficult investor questions or interactions (real or hypothetical), send them through to me. I’ll have a look and help you (1) curate a response or (2) review how you’ve handled it so far.  

Cheers,

Kevin.