EMBRACE THE NEW NORMAL

How do I adapt my equity story to the new post-COVID reality?

An Equity Story is a fundamental tool for any listed company as the reflection of its value project and investment proposal

The economic and social effects of this pandemic have led to a paradigm shift in our consumption, work and social relationship habits that is still being felt today. The prospects for returning to the normality that existed before the coronavirus hit are hard to predict, at best. In a context of great social and economic instability, every company will need to face the challenge of knowing how to adapt to this new reality.

In the field of capital markets specifically, two factors come together to bring both opportunities and challenges at the same time: significant liquidity and investment capacity among private capital funds combined with unprecedented caution and analysis of the investment risks. Investment projects will be painstakingly examined to reject those that fail to offer the right risk/profit combination. With the continued existence of various investment profiles, the universe of companies to analyze will shrink to only encompass those that have successfully understood the new scenario in which we find ourselves. For these companies, resilience will no longer just represent added value but will actually be an obligation.

How should companies position themselves? Companies will not only have to enhance their image and transparency. They will also need to convince persuasively and convey their value proposition to markets and public opinion. Not only through the compulsory reporting channels required by regulators but also through better access to information for investors based on tools that are increasingly supported by digital solutions. A return to basic messages, the purpose and vision, capable of reflecting the stand-out elements of the company and its expectations for future development can make the going easier when communicating added value propositions.

The Equity Story is one of the fundamental documents for any company and is particularly important for listed companies, especially when it receives unequivocal and proactive commitment from management in terms of compliance, tracking and communication.

The main goal for this document is to impact on the various company stakeholders, especially investors and financial analysts. To do so, it needs to include the past, present and future of the company (forecast guidance), reflecting the company’s investment theory. Besides systematically updating the equity story, it should also be highly accessible. This is the only way to guarantee better knowledge about the company, a proper understanding of it and, therefore, a fair evaluation by the market.

At LLYC, we are experts in positioning companies vis-à-vis their various stakeholders. We have a multi-disciplinary team with experience in finance, business development and reputation management that is highly adept at using the specific tools for conveying company value propositions. Just like all the other tools at our disposal, the equity story forms part of the overall vision for positioning projects.

Challenges.

How do I integrate my ESG position into the equity story after COVID?

This crisis is further boosting the unstoppable trend in ESG investments as safer long-term values. Investors are demanding greater transparency in terms of corporate governance, sustainability and how the company has supported its various stakeholders during the crisis.

What role do social media play in communicating the equity story?

Companies need to consider this trend within their communication strategies and use them as another channel to communicate key messages from the equity story and reach their stakeholders. Social media allow new equity story formats to be shared, such as corporate videos, infographics, interviews with management, etc.

Might the post-COVID-19 situation increase shareholder activism?

An upturn in activism is very likely. As a result, companies should prepare themselves and anticipate through better communication with investors, increased transparency and an equity story adapted to the current situation. A comprehensive communication strategy is essential.

How is COVID-19 affecting direct relationships with investors?

The pandemic has accelerated virtual meetings and is an opportunity for companies to reach more parts of the world and contact an increased number of investors, while reducing travel and saving time.

Contact an LLYC expert.

Senior Director of Corporate and Financial Communications
España
Jorge López Zafra
+34 91 563 77 22 (ext. 2257)
Partner and Managing Director Portugal
Portugal
Tiago Vidal
+351 21 923 97 00
CEO US
Estados Unidos
Carlos Correcha-Price
+1 786 5901000
Director of Corporate Financial Communications
México
Evelyn Espinosa
+52 55525 71084
Managing Director Panama
Panamá
Manuel Domínguez
+507 2065200
Managing Director Dominican Republic
Republica Dominicana
Iban Campo
+1 809 6161975
Partner and Managing Director Colombia
Colombia
María Esteve
+5717438000
Managing Director Ecuador
Ecuador
Carlos Llanos
+593 2 256 5820
Managing Director Peru
Perú
Gonzalo Carranza
+51 1 222 9491 (ext. 219)
Director of Financial Communication and Advocacy
Brasil
Mauro Teixeira
+55 11 3060 3390
Managing Director Chile
Chile
Marcos Sepúlveda
+56 22 207 3200
Partner and Managing Director Argentina
Argentina
Mariano Vila
+54 11 5556 0700

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