Extended trading calls for better IR communications

BOSTON: As extended trading hours loom on the horizon, IR professionals need to take a hard look at their methods of communicating with investors.

BOSTON: As extended trading hours loom on the horizon, IR professionals need to take a hard look at their methods of communicating with investors.

BOSTON: As extended trading hours loom on the horizon, IR

professionals need to take a hard look at their methods of communicating

with investors.



That was one of the key messages from a recent PR Newswire gathering of

communications and IR experts in Boston (September 29).



While the Internet has already provided a platform for investor

information, trading and chat rooms, pros believe extended hours will

lead to a need for better communication with the individual investor

trading from home after work.



According to NASDAQ assistant director Gabriela Anaya, forces driving

extended hours include access to information by everyone over the

Internet and growth in individual household investors over the last five

to 10 years - 45% of households now own stock. Anaya said 10% of

household income was devoted to stock in 1998, but that figure has since

risen to the current level of 20%.



Extended trading hours are also expected to impact on the timing of

press releases.



’An after-hours news release could exacerbate both volatility and

trading volume,’ said Louis Thompson Jr., president and CEO of the

National Investor Relations Institute (NIRI). ’We’ll probably see a

shift towards putting out news releases before the market opens or

during trading hours.’ Anaya added that with a number of otherwise

undisclosed corporate developments slowly leaking out through chat

rooms, companies may want to consider a trading halt to allow all of

their news to be disseminated at once.



Pros also argued that with extended trading hours, companies will have

to grow their IR departments.



’Today there are almost 11 million online trading accounts, and that is

expected to double by the end of 2001,’ said Thompson. ’You can’t do

your job with an IR department of one or two people. When we asked NIRI

members if they plan to extend their staffs to deal with extended

trading hours, only 3% indicated it was a possibility.’



With so many individuals investing online, experts are also reexamining

the rules for disclosure of information via the Internet. Currently, the

only acceptable vehicles for disclosure are Dow Jones, Reuters,

Bloomberg, The Wall Street Journal, BusinessWire and PR Newswire.



’We’re beyond an era where the press release is the only means to

achieve full and fair disclosure,’ said Thompson.



’If trading is going on real-time during conference calls - and it is -

then a web cast, which provides access to everyone including the media,

individual and institutional investors, ought to be a means for full and

fair disclosure on a real-time basis.’



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