Small cap companies are gearing up for their earnings calls, and a well-crafted narrative is crucial to cover key points of the quarter and maintain credibility. To effectively manage expectations, companies should focus on what they can control, structure a well-thought-out story, and engage in timely disclosure.

With limited budgets for ESG and investor relations spend, small caps would be better served by being a good corporate citizen: run your business responsibly with strong internal controls and good disclosure practices.

Consistent, two-way message flow between a company and the broader financial community is akin to allocating monies for both guns and butter. Anyone who studies economics understands that an investment in IR will produce future dividends and returns.

Our overseas client, a micro-cap (defined as public companies under $300 million in market cap) just completed their first in-person non-deal roadshow for 2023 on the East Coast this week. Here is what we learned on this esssential IR program when targetting and meeting with investors.

The markets move on unanticipated good news, not information it’s expecting. While that sounds mutually exclusive, it’s really not. It’s far better to hold off and time the news drop appropriately to gain as much exposure and bounce as possible. While no one should place an excessive reliance on forward-leaning statements, some investors may factor them in when calculating enterprise value.

As job cuts make headlines, discussions have focused on how, when and where to inform workers. Salesforce, BlackRock, Goldman Sachs, Amazon, Coinbase, and others have blamed waning demand or fall out from a hiring surge during the pandemic. Regardless of the reasons, the recurring explanation in the press closely follows details listed in the 8-K filing swiftly followed by an apology and more often than not, a thank you by the CEO.