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How to make your micro-cap company trade

Getting exposure for  micro-cap or small-cap public companies is a significant challenge. Sell-Side analysts only cover micro caps under specific circumstances, and Buy-Side funds won’t even take the call. On top of that, it’s difficult to get enough data to make effective decisions regarding investor outreach. Most small caps rely on the networks of the founders and management, then just hope to make enough noise among a broader retail market to create the volume to take it to the next level. Through a delicate combination of digital investor relations strategies and inbound data collection, we’ve developed a way to identify interested investors, keep them interested  and create excitement around micro cap companies,.ultimately creating and sustaining trading volume.

The following is a case study into how to do digital investor relations for a micro-cap stock using a real-world example of one of IR Smartt’s current clients. If you read on, you’ll see how our client saw a 500% increase in their stock price and on some days as much as a 1600% increase in their trading volume by following our formula for just 6 months.

The Client

Lingo Media corp, a Canadian Ed-Tech company with series of digital products and services designed to teach the world English. The Ed-Tech sector has had a tough time of late. But the market potential of Ed-Tech is considerable.

The Results

To see where Lingo Media started and where they are now, please head over to the company’s stock chart on Google Finance and expand the date range to the period April 15th through November 1st.

HOW WE DID IT

IR Smartt’s approach to marketing a micro-cap company sounds surprisingly simple… Tell the story online using the most effective digital marketing tools available. We were fortunate enough to have a strong, undervalued client with an attractive story and emerging growth. The only missing piece was effective digital communication.

The Website

The client’s original website wasn’t engaging or inviting. The company’s strong business in a growing market sector wasn’t being impressed on investors. The screen shot below shows the old home page in all its glory which can be found using the Internet Archive’s Way Back Machine. This is a great tool for uncovering old sites.

Visitors had to virtually mine for what they were looking for in a presentation that was about as welcoming as an IRS library. This type of understatement is sometimes a good look for big and mid-cap companies, but companies with a $4M market cap need to show visitors what to look at.

One of the first things we did for Lingo was completely overhaul their corporate website. We moved it to the WordPress CMS for easy publishing and then integrated it with a series of digital marketing tools that assist us in marketing the company to investors. This includes adding website forms, a way for investors to download the company’s investor kit (deck and fact sheet) and simplifying the content so its easy to understand and absorb. The new site is both attractive and highly-functional as a tool for driving new investors and educating them in the company’s value proposition.

You can see a screen shot of the new site below, or you can also checkout the live version at lingomedia.com

Blogging and Social Media

Lingo Media had a reasonable following on Social Media when we started working with them. We did a bit of a clean-up, identified the investment-oriented followers and separated out irrelevant, inactive or bot followers. The company’s main growth sector is their EdTech business, which generates its fair share of Twitter and Facebook activity, though not always from investors.

We were able to leverage that audience by producing interesting content that was relevant to the audience, and pushing it out through social channels and by email. Our content team worked with company management to produce blog posts about the business of EdTech, about Lingo’s space in that particular market, and about the exponential growth in the client’s target markets (English Learners). We produced infographics, re-shared other excellent content with insight about how the EdTech market is developing and where it’s going. The body of work is indicative of a company that knows its business. As investors of all types took notice of this, and we were able to show the client who they were specifically.

Inbound IR

As the traffic started to build from our sustained social media content push, we used sophisticated tracking tools to gather data about investors who came to the website and read information. We’re able to deliver to clients the very best in intelligence about the people and companies who are interested in their story. We’re able to show who they are, how often they visited the site, and what they’re most interested in. We provided the company’s in house IR with access to a platform that allows them to keep track of their email campaigns, make educated decisions about who to prioritize for outbound calls, and even better manage and schedule presentations and road shows.

Instead of knowing only that their website and press releases were getting a given number of undefined hits, the company was able to classify that traffic. Our bundled investor intelligence service showed management which content was attracting retail investors, institutional investors, buy side analysts, sell-side analysts. We could even do reverse lookups to determine whether or not people who IR was pursuing were seriously interested by analyzing their level of engagement with the client’s website.

Inbound investor relations is the name we’ve affectionately given to the full scope of our digital program for a public company.. It increases efficiency by orders of magnitude and IROs have told us that it’s supremely addictive. Knowing whether or not a campaign is working is the most effective way of determining whether or not to keep going or change course.

Summary

The refrain of the good company that “is just under followed” is often repeated because it’s so common. The world is full of institutional and retail investors as well as buy-side and sell-side analysts who are searching for great companies in growing sectors every day. The companies who assert themselves and show the investing community that they’re committed to being followed are the ones who get noticed.

We’re proud to have been able to help Lingo Media gain the following it deserves and are looking forward to helping other well-run small cap companies do the same thing.

Tim Howard

Tim is our CEO at IR Smartt Inc. He leads the strategy and business development teams, driving the company forward. Tim's previous professional experience included extensive work in Journalism and Online Publishing.