The COVID-19 pandemic brought about unprecedented macroeconomic challenges and greatly impacted the business operations and financial performance of domestic and international companies.
During Q1 2020, increased market volatility resulted in an immediate decline in global markets which was soon followed by a rebound in performance during the latter half of the year.
Companies quickly learned to adapt their investor relations strategies to reinvent the way in which they conducted business — exploring alternative communication channels and seeking more efficient ways to maintain shareholder value in the wake of uncertainty and market volatility.
Adding Value To Shareholders
Increasing shareholder value is a universal goal and top priority for investor relations teams.
In the paper, “OTCQX: Investor Relations Key In a Pandemic,” OTC Markets and Oxford Metrica studied the quantifiable impact of an international company’s shareholder value after joining the OTCQX Market. Data showed that, on average, 128 basis points of value were created for shareholders 80 days after joining OTCQX.
It was hypothesized that the rise in value may be a result of the increased transparency, disclosure requirements, and corporate governance practices required by OTCQX. Combined, these factors signal a positive response in the issuer’s home market, thus leading to an increase in shareholder value.
Home to 450 international and U.S. companies, OTCQX, the premium trading tier, can provide the tools issuers need to maintain, if not, increase shareholder value during a market crisis. The OTCQX Market provides international companies with a cost-effective platform for investor relations teams to more easily and effectively communicate with U.S. shareholders.
Notable companies traded on OTCQX include Roche Holdings (OTCQX: RHHBY) (OTCQX: RHHBF) (OTCQX: RHHVF), Adidas (OTCQX: ADDYY) (OTCQX: ADDDF), Danone (OTCQX: DANOY) (OTCQX: GPDNF), Repsol (OTCQX: REPYY) (OTCQX: REPYF), and BNP Paribas (OTCQX: BNPQY) (OTCQX: BNPQF).
Effective Communication With Shareholders
As a general rule, communication is a key component of any financial relationship. And this rule is just as prevalent when discussing the relationship between management and shareholders, especially during times of economic uncertainty.
The transparency and disclosure inherent in the OTCQX Market gives international companies the ability to provide U.S. shareholders with comprehensive financial and market information on the company. Additionally, through OTC Markets Group’s Virtual Investor Conferences, international companies trading on OTCQX have an opportunity to utilize an interactive intermediary online platform to engage with U.S. investors.
Occurring 1-3 times per month, these remote conferences provide international companies with an additional forum and communications channel to address a larger number of U.S. investors.
Providing An Efficient & Cost-Effective Solution
OTCQX offers companies a less complex, more efficient, and cost-effective market for an international corporations’ shares to be traded in the U.S. In comparison to a full listing on a U.S. national exchange, OTCQX offers an annual reduction ranging from $1-$2 million per annum.
Companies are also able to avoid the complex, onerous, and costly U.S. regulatory and exchange requirements of the national exchanges. In comparison, the OTCQX offers an alternative ‒ a premium SEC-recognized established public market that is the right fit to help international companies maintain their U.S. trading position during a crisis.
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