Our motto is “getting to know management beyond the stock price.” Our goal at Grapevine is to invite the best-in-class management teams to our digital platform so that management can interact with sophisticated investors who understand the value of investing in microcap stocks.
Microcap stocks have been proven to beat the market and their larger cap counterparts over the long-term. For example, one study shows that, between 1927 and 2016, microcap stocks earned a compounded annual return of 17.45%, almost double the return of largest capitalized stocks. So, the facts are on your side if you’re part of a best in class management team with a best in class product or service offering. But, history doesn’t tell the whole story. Microcap stocks have clearly underperformed the broader market and large-cap stocks since 2008. As an executive of a microcap company, you probably understand the challenges you have been facing to attract investor capital from retail and institutional investors.
Here’s the way things used to work in the microcap universe:
Retail investors would buy your stock, eventually pushing it to levels where institutions could buy it. If your shares were trading on the OTC, your stock would eventually rise to levels where it would qualify for a listing on a major exchange.
However, 2008 eliminated many long-term oriented retail investors from the microcap universe who provided the initial fuel to power microcap value stocks higher. Furthermore, the regulatory environment has changed, making it harder for brokerage firms to transact in microcaps and for institutions to buy your stock. To make matters worse, investors are more short-term oriented than ever with holding periods that have gone from six years to six months. This causes them to crave short term pump and dump schemes, in favor of undervalued long-term growth and value stories. Furthermore, the popularity of passive investing choices like Index funds and ETFs are “stealing” capital from stock picking strategies that had been directed toward the microcap universe.
These shifts in the financial landscape have resulted in less demand for your stock because there are less people available that can or want to by your stock. That’s why it’s vitally important for you to be able to communicate with what is left of your relevant investor base and move up the market cap food chain.
While the pendulum usually swings to revert to the mean, we don’t know when that will happen. Until then, it’s important that you communicate with the right investor base and adopt sensible approaches to reaching them, without spending too much capital.
The performance of your company’s stock ultimately depends on how well you perform as a company, regardless of the amount of capital you spend on your investor outreach programs.
let’s face it, in the end, your stock goes up if you show investors that you can meet your objectives and goes down if you don’t.
We are not advocating that you overspend on your investor outreach program. But you do have a responsibility to your Board of Directors and shareholders. That’s why we have priced an annual Grapevine Membership at a fraction of the cost of what you would typically pay for one month of investor relations services.
We are not an investors relations firm, but if you do not currently have IR an program, we may be the perfecto option for you to start connecting with investors. If you already engage an investor relations firm, please understand that we are not asking you to replace them. We want to work with your team to make their job easier and be more effective.
More and more companies are utilizing social networks, the internet and video to tell their message to investors. But a big problem exists. The manner in which these new communication channels are being utilized are not focusing on highlighting best-in-class microcap companies. It’s reasonable to assume that you don’t want to be highlighted alongside pump and dumps and other low-quality companies. Because we are investors, we built Grapevine for investors. We know how they think and the questions that management needs to address to connect with investors.
There is currently no one stop solution for investors to view archived on-line investor conferences, slide presentations and management interviews for best in class microcap companies. Sure, an investor can go to sec.gov or your website to find your presentation material. But think of Grapevine to be akin to the convenience consumers get when they go shopping in a mall with lots of choices. When investors visit Grapevine to see a particular company, they may see your presentation and be attracted to your story. We create a synergistic research environment.
What good is a slide presentation filed with the SEC without hearing a company executive talk through the slides? There is only so much an investor can learn from static slides. Listening and connecting with management could be the one thing that helps an investor cross the line from being a passive observer of your story, to taking action to reach out to you or buy your stock. We are in a new social media era where people want engagement, they want to get excited through your story.
Brick and mortar conferences will always have their place in your outreach program, but going digital will allow you to significantly increase your investor reach.
Interactive content has become a superior online medium when compared to written content, a reason why the market for video news has ballooned in recent years. Their engagement rate is approaching 3 times that of regular text dissemination.