Real-Life Communication
An investor relations (IR) specialist must have two skills on nearly
the opposite ends of the spectrum. Not only must an IR specialist be versed
in math, but they must excel in communications, both oral and written. After
all, an IR specialist must communicate to shareholders and to Wall Street
the activities of the company.
Jay Gould, director of IR at a major
corporation, says he does this with press releases, annual reports and presentations.
If news hits the "Street" (an affectionate term for Wall Street), Gould usually
composes either a press release or a brief paper that aids him in explaining
the news to those who call him.
Annual reports take a lot of time to
compose and are, as the name suggests, the year-end glossy booklet a company
puts out that outlines what happened in the past year and explains future
strategies. Also included are management profiles and abbreviated financial
statements.
Besides written skills, an IR specialist needs oral skills,
says Alex Singal, an IR director. They must be very articulate, she says.
An IR specialist must also be able to make presentations to shareholders and
analysts.
Late last night, after the stock market closed, your company
reported how much money it made for the first three months of the year, or
the quarter. The amount of money made was a little better than what Wall Street
expected -- Wall Street keeps tabs on all companies whose stock is traded
on the market.
You need to compose a press release outlining what your
company reported and a brief statement about whether this number was in line
or out of line with what the Street expected.
A press release always
has "For Immediate Release" in the top left corner.
Normally, you will
also need to compose a headline for the release, which will pique interest.
In the case of an earnings release, however, people are interested already.
They want to know what the company reported, so a simple headline will do.
Immediately before beginning the body of the press release, you must put the
location of the company's headquarters and the date of the release.
Compose
a one- to two-paragraph press release in proper format. Here are the facts:
Dinner
Delight, Inc., the restaurant company you work for which is headquartered
in San Diego, California, reported quarterly earnings of $900,956. This equates
to earnings of $0.10 per share. Last year, this number was $0.08 per share.
The
analysts, stockholders and the Street expected your company to earn the same
amount as last year ($0.08), so you surprised them by a couple of pennies.
The reason why you were able to surprise the investment community is because
your company ran a promotion on chicken sandwiches with sweet potato fries.
Because
you offered this special at a reasonable price, more customers came into the
store. Your sales went up. Dinner Delight had a five percent increase in customer
traffic over last year. After talking to the chief executive officer, Tom
Golden, you want to communicate that management believes this traffic can
be maintained. The executives feel pretty strongly about the company's performance
this year.