In the first
part of a two-part investigation into virtual roadshows, Neil Stewart
finds it’s time for telepresence. Next month: desktop and mobile video
Thailand’s Indorama Ventures
may be setting some kind of record, doing two to three roadshows every
month, making Richard Jones, head of investor relations and corporate
communications, a prime candidate to do virtual roadshows using video
conferencing. But first he wants to see a rise in quality – and a drop in
the price. For other IROs, that magical quality/price point has already
Video conferencing has had no shortage of opportunities to grab IR
professionals’ attention, from the SARS outbreak in 2003 to the 2008-2009
financial crisis. IROs, however, often frustrated by glitches, have always
gone back to flying.
Now the technology has improved and the bandwidth has increased, and many
companies have invested in some level of video conferencing for
communicating between their offices, from half-million dollar ‘immersive
telepresence’ rooms all the way down to less elaborate systems costing just
a few thousand dollars. So have investment houses; so have sell-side firms.
And now the three corners of the IR equation are starting to use video
conferencing to talk to each other.
Cisco, as one of the two market leaders with its TelePresence branded
product, may also be the world’s number one user of the technology. The
primary use is communicating with Cisco’s network equipment customers. But
the company’s IROs have also become big fans. For example, in the few days
following earnings announcements, top shareholders now regularly drop into
telepresence suites in Cisco’s offices in New York and Boston for a quick
catch-up with the CEO or CFO, supplanting traditional post-earnings
Last year Cisco took it up a notch and hosted a global session. Investors
gathered in New York, Boston, Denver and San Francisco for presentations by
Cisco business leaders from around the world. Those who couldn’t come to a
Cisco office for the telepresence event could listen in via webcast.
Another example was a February 2011 event organized by Bank of America
Merrill Lynch (BofAML). Groups of investors in eight cities in the US and
Europe joined in. Matt Hardwick, Cisco’s head of international IR, estimates
that approximately 18 percent of Cisco’s total market cap was represented in
Hardwick says his remit, which covers everywhere from Tokyo to London,
benefits especially from telepresence. ‘For my last Asian roadshow, I put
feet on the ground only in Tokyo and Singapore, but I talked to investors in
Beijing, Shanghai, Hong Kong and Sydney by telepresence. What could have
amounted to at least a five-day roadshow was done in two and a half days,’
Coast to coast
Polycom is the other telepresence leader, sharing the majority of the
worldwide market with Cisco. In terms of its IR, Polycom is far along the
tech path. It has done video webcasts of its quarterly earnings call for
more than a decade, and last year CFO Mike Kourey started posting brief
YouTube earnings recaps – so using its own telepresence systems for investor
meetings fits right into Polycom’s IR trajectory.
In February 2009 the firm did its first bi-coastal analyst event, with
investors at Polycom’s Santa Clara headquarters and its New York City
conferencing center. At first investors would ask ahead of time: ‘Where will
the CFO and CEO be?’ Kourey would always answer: ‘It doesn’t matter: we’re
all together either way.’
No need to
know the way to San Jose
Janet Dignan on Cisco TelePresence
Attending a meeting at an office in the
City of London with a group of equity analysts and the top brass of a US
company is a pretty low-tech matter. Meeting the top brass while they
remain in their West Coast US HQ could be described as rocket science.
Because we really did meet them. We were
in Cisco’s London headquarters; they were in Cisco’s San Jose,
California headquarters. We were sitting at desks arranged in a
semi-circle; they were sitting at mirror-image desks forming the other
half of the circle. Of course we couldn’t shake hands. We could,
however, make eye contact – with eyes that were the same size as those
of the other people in our room in London.
Is this the key to telepresence? The fact
that the people you’re talking to are life-sized? Or is it the
gazillions of gigabytes of bandwidth that allow the conversation to flow
freely, notwithstanding the thousands of miles in between? Or maybe the
trick is having the same furniture in both places, so it really does
seem as though you’re all sitting at the same table.
Whatever it is about Cisco TelePresence,
it works. The old song describes finding peace of mind in San Jose –
maybe you can get that now without even actually going there.
‘Doing it bi-coastally gave
investors access to a much broader swathe of the management team, and we got
to meet a lot more of the investment community,’ Kourey points out.
Polycom followed up with another bi-coastal event in November 2009 then, in
December 2010, turned it into a transatlantic analyst event with its new
executive briefing center in London. Polycom’s chief executive, Andy Miller,
was already in London on a sales trip while Kourey was in New York and other
Polycom executives participated from California. Around 30 to 40 investors
gathered at each of the locations.
Today Cisco investors mostly go to Cisco’s offices for telepresence events,
and Polycom’s investors go to Polycom’s offices, but many brokers and large
institutional investors are acquiring their own high-end video conferencing
systems, opening the way for many more IROs and their management teams to
try it out. ‘It’s a great differentiator for the brokers,’ Hardwick says.
Plus, public telepresence rooms that can be booked by the hour are popping
up, for instance in around 13 Marriott hotels.
BofAML began a big telepresence push earlier this year and has quickly
become one of Cisco’s biggest customers for the product – using it for both
external and internal meetings. The investment bank’s corporate access team
has also taken notice and in recent months has started offering company
managements the chance to try telepresence for investor meetings.
Amy Ellis-Simon, managing director and BofAML’s head of corporate access,
says the bank has held successful group meetings – linking management in one
location to investors in Texas, New York, Chicago, London, Boston and San
Francisco, for example – as well as pure one-on-ones.
Kourey hints that Polycom is currently working with an unnamed company on a
large investor conference involving numerous issuers that will rely on
telepresence. ‘Imagine an investor conference without any of the travel or
time loss usually associated with it,’ he says. ‘People are hungry for it.’
Breakdown in communications
John Schoger, president and co-founder of Voyager Institutional Services, an
independent corporate access firm in Columbus, Ohio, has organized a few
telepresence meetings for some of the Midwest’s biggest institutional
investors. He’s skeptical about ‘interoperability’, or the ability of
different companies’ video conferencing facilities to interact. ‘Big issuers
and investors have these million-dollar systems but they’re not talking to
each other,’ he says. ‘It should be as easy as picking up the phone.’
Clariant, a Swiss specialty chemicals firm, has a top-notch video
conferencing system to connect its offices around the world; so does
institutional investor AllianceBernstein. But when Siegfried Schwirzer,
Clariant’s deputy head of IR, tried to set up a telepresence meeting between
the two, it was a disaster. ‘Our system didn’t communicate with Alliance’s,’
Kourey says problems with interoperability will soon be history. For
example, Polycom recently launched the Open Visual Communications Consortium
with 14 of the world’s biggest telecommunications firms, aiming to make
video conferencing more seamless between carriers.
As more buy-side firms begin to use telepresence, room-based video
conferencing systems or desktop video, Kourey has been doing more
one-on-ones using video. He adds that he schedules a half-hour for a phone
call but a whole hour if it’s a video call: ‘Video is simply much more
For now though, most IR professionals say the demand for live meetings
remains high and telepresence meetings are still rare. Interviewed via video
from Bangkok, Jones says he would use video conferencing if it were
dramatically cheaper than taking a plane and staying in a hotel.
But having tried a desktop virtual roadshow system and looked at a
telepresence system but found it too expensive, he is happy to keep flying.
This article appeared in the
September print edition of IR magazine.
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