Monday, March 26, 2012

The Importance of Investor Relations Consulting in Providing Exposure for Startup Enterprises

Developing companies face a number of challenges. Many such companies know they have a good idea, whether it be a new technology, human service, or something else. They know their idea can have a major, profitable impact. However, the conditions have to be right. These companies often rely on a new, unknown, and untrusted idea, concept, or product. They may also face difficult competition from more established players in their market. In an environment defined by these sorts of marketing challenges, it can be difficult to gain sufficient startup capital to establish a competitive market footprint. Moreover, these challenges can be greatly exacerbated in a weak economy. In a pool of diminishing resources, consumers are cutting back on all but the most essential goods and services, and suspicious, funds-short investors are wary about anything that does not look like a sure bet. Many larger, established companies have specialists permanently on staff to help the company frame its information flow in the face of this kind of skepticism, but it may not be financially feasible for a startup to hire such a specialist on a permanent basis.

A good investor-relations consulting firm can help a company facing these daunting prospects. There are a variety of consulting firms available, such as Emerging Markets Consulting, that specialize in working with startup enterprises. These consultants offer strategic planning to help the fledgling company better position itself in relation to its peers. Oftentimes, the biggest challenge to startups is visibility. A new company may be an unknown quantity in a field of established, trusted competitors, and what little exposure the company does have may do more to hurt it than help it if that exposure is not conducted in the proper manner. In such conditions, the new company needs to construct a compelling story that can convince potential investors that what the company has to offer is worth an investor’s money. A good consulting firm will provide the coaching needed on how to use both traditional and digital media—including websites, webcasts, mail, and email—for the company to make a compelling case for the viability of its product or service. An effective consulting specialist will understand how best to deploy these media vis-à-vis developing market trends to create an attractive profile that puts the client company’s long-term prospects in a positive light and that helps the company aggressively answer potential investor concerns. Consultants will also be able to provide sound advice regarding how to properly follow oftentimes complex federal regulations.

Perhaps most importantly, a quality such consulting firm will have access to concrete resources. Investor relations specialists are in the business of building relationships in the investment community, and the best such specialists are trusted by expansive networks of contacts. They can oftentimes put startups in contact with precisely the right people needed for the company to establish a strong capital base.

Saturday, March 17, 2012

US futures flat after Dow hits post-crisis high

US stock market futures flat a day after Dow hits highest point since 2007; banks rising

U.S. stock market futures are little changed a day after stocks posted the biggest gains of the year.

Dow Jones industrial average futures were up 5 points to 13,115.

The index closed at its highest level since 2007 on Tuesday — within 1,000 points of its record — after a day of encouraging signs for the economy: Retail sales were strong, the Federal Reserve was optimistic and most of the nation's biggest banks got a clean bill of health.

The Nasdaq composite index also reached a milestone on Tuesday, closing above 3,000 for the first time since December 2000. Inpremarket trading Wednesday, Nasdaq 100 futures edged up 0.50 to 2,694.50.

S&P 500 futures added 0.3 points to 1,391.

Bank stocks were gaining modestly in premarket trading after surging Tuesday. JPMorgan Chase & Co. added 6 cents in the premarket after leaping 7 percent on Tuesday. Bank of America Corp. shares added 20 cents ahead of the opening after Tuesday's 6.3 percent gain.

Citigroup Inc., which also jumped more than 6 percent Tuesday, fell 4.3 percent in premarket trading after being one of the four major banks that failed the Fed's annual "stress tests."

The bank rally started Tuesday when JPMorgan Chase said it was raising its dividend and launching a $15 billion stock buyback program, all with the blessing of the Fed.

The Fed was planning to wait until Thursday to release the results of its stress tests, which determine which are healthy enough to raise their dividends. After JPMorgan's announcement, the Fed released the results early.

The Fed's action was the latest sign that the U.S. financial system was getting healthier.

"That's what really made the day," said Jeffrey Kleintop, chief market strategist at LPL Financial. Banks were easily the best-performing stocks in the market, gaining almost 4 percent as a group.

The Nasdaq gain was also notable. On Dec. 11, 2000, the last time the Nasdaq closed above 3,000, it was in the middle of a horrifying slide — from a peak above 5,000 in March 2000 to just above 1,100 in October 2002.

At the beginning of 2000, the peak of the dot-com frenzy, investors valued stocks in the Nasdaq composite index at an astronomical 175 times their per-share earnings over the previous year.

Google was not yet a public company, and the iPod didn't exist. Apple pulled in $2.3 billion in quarterly revenue. Many Nasdaq companies were Internet startups with high stock prices but big losses.

And many of them failed, taking the Nasdaq down with them.

Jack Ablin, chief investment officer at Harris Private Bank, said the key difference between the Nasdaq then and now is that the technology companies that dominate the index only promised profits 12 years ago.

"The Nasdaq hasn't done much of anything for 12 years, but it's had a huge rally in earnings," Ablin said.

Today, the profits are real. Apple reported $46 billion in revenue in its latest quarter. The Nasdaq composite, which includes more than 2,500 companies, trades at about 24 times earnings, according to Birinyi Associates.

Meanwhile, the S&P is a 12 percent rally from its record of 1,565.15.

Brian Gendreau, market strategist at Cetera Financial, said stocks could still go higher. Investors are paying roughly 14 times the past year's earnings for the S&P 500 index. The long-term average is closer to 15.

"Valuations are still very cheap," he said.


AP Business Writer Eileen AJ Connelly contributed to this report.

Thursday, March 15, 2012

BMW warns sees no signs of end to incentive war

BMW (GER:BMW.DE - News), the world's largest premium carmaker, warned that more and more profit-eroding incentives are being offered to sell luxury cars at the moment, adding there are no signs this will change anytime soon.

"What we see with the beginning of the fourth quarter is that the pressure on the pricing front has increased. When it will end is, at the moment, not clear," finance chief Friedrich Eichiner told analysts during a webcast.

BMW does not break out separately the net effect of pricing power on its earnings due to competitive reasons, but the Automobile segment's earnings before interest and tax (EBIT) improved by 3.14 billion euros ($4.12 billion) last year thanks to a combination of balance of volumes, sales mix and pricing.

Eichiner also said efficiency gains would be in the medium to high hundreds of millions of euros this year, compared with 520 million in 2011.

According to Eichiner, BMW's financial services business set aside a risk provision of around 100 million euros last year due to exposure to the Southern European luxury car market. ($1 = 0.7628 euros)

(Reporting by Christiaan Hetzner)

Wednesday, March 14, 2012

Magnitude 6.1 quake jolts eastern Japan, no tsunami warning

TOKYO (Reuters) - An earthquake with a preliminary magnitude of 6.1 hit east of Tokyo on Wednesday but no tsunami warning was issued and there were no initial reports of damage or troubles at area nuclear plants, the Japan Meteorological Agency and local media said.

High-speed bullet trains serving northern Japan were halted and the two runways at Tokyo's Narita International Airport were closed after the quake but quickly resumed operations, local media reported.

No abnormalities were reported at the Tokai No.2 nuclear power plant northeast of Tokyo, which has been shut for routine maintenance, or at Tokyo Electric Power Co's tsunami-hitFukushima Daiichi and Daini plants, local media said.

The earthquake, which caused substantial shaking in Ibaraki and Chiba prefectures east of Tokyo, followed just a few hours after a magnitude 6.8 quake jolted northern Japan. A tsunami warning was issued but later lifted after that earthquake.

Just over one year ago, the northeast coast was struck by amagnitude 9 earthquake, Japan's strongest on record, and a massive tsunami, triggering the world's worst nuclear crisis in 25 years at the Fukushima Daiichi plant.

There has been a five-fold increase in the number of quakes in theTokyo metropolitan area since the year-ago disaster, the Tokyo University Earthquake Research Institute has said.

(Reporting by Kaori Kaneko; Editing by Edmund Klamann)