IR & your company’s market cap

In an article on perception studies in IR magazine, Brian Rivel, president of Rivel Research Group, drawing on years of talking to institutional investors about companies and stocks, noted a conclusion on the value of investor relations itself:

We can point to cases that clearly show the impact good IR has on valuation. In our experience, 10 percent of company valuation is tied to truly superb IR. A downside valuation of 15 percent accounts for bad IR. That’s a 25 percent swing, so companies that communicate well attract a much higher valuation.

– Brian Rivel, quoted in Adrian Holliday, “Feedback at a Cost,”
IR magazine, June 2008, p.41

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