Reengaging Wall Street

The Situation

The client, a one-time high-flier with a 12-year accumulated deficit of more than $400 million and little to show for it, had fallen out of compliance with the NASDAQ $1 minimum bid and stockholders’ equity requirements. Under new management, the company had recently announced a new strategy and was working to gain momentum under an expanded business focus. The company faced the challenges of re-establishing its position with the investment community and communicating the merits of its highly technical business that would require multiple future equity raises.

LHA’s Solution

• Conducted a perception audit to determine investor interest in the new strategic direction, concerns regarding the technology and resistance to investment given the firm’s considerable past history.
• Developed messages that reflected management’s vision, investment considerations and technology advantages.
• Laid out development milestones and provided financial guidance to assist Wall Street assess management’s progress.
• Revised collateral including the company presentation and created a corporate Fact Sheet to establish the technology focus and present the investment opportunity.
• Reinforced positioning in all press releases to communicate progress and the importance of each announcement in the overall strategic focus.
• Arranged extensive outreach with targeted investors with interest in turnaround situations and with sell-side analysts with technical knowledge of the space that included a series of roadshows and conference calls.
• Sustained outreach with four Analyst Day events, including two in New York and two in conjunction with industry conferences that included well-respected thought leaders as well as presentations by management.

LHA’s Results

During the course of LHA’s three-year engagement, participation on quarterly conference calls and webcasts increased from less than 20 to more than 200. Average daily trading volume increased from 50,000 shares to 1.5 million shares. The stock price increased from 60 cents to more than $27. The company completed several equity capital raises totaling $128 million. Analyst coverage increased from none to 11, and institutional investors increased from 14 to 146.