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Think an IPO is the only way to access the Public Markets?

The high cost to complete an IPO onto a U.S. stock exchange – on average $2.5 million*, combined with the declining bank appetite for small-cap IPOs, is forcing many small companies to stay private longer. However, the public markets offer tremendous benefits for small-cap companies seeking to raise capital and grow their businesses. Fortunately, an IPO isn’t the only method for small companies to gain the benefits of a public market.

In our second whitepaper with IR Magazine, on Small-Cap company issues, we focus on three alternatives to the traditional IPO: Continue reading “Think an IPO is the only way to access the Public Markets?” →

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3 Best Practices to build an effective IR Strategy

With more than 6,000 small and micro-cap companies trading on our markets, we are uniquely positioned to understand the issues they face, and help them effectively navigate the public markets. That’s why we’ve partnered with IR Magazine to develop a Small Cap IR whitepaper series that addresses the unique challenges in navigating the public markets, including high fees and changing market structure.

A successful public market experience starts with developing a well thought out IR strategy.

The most successful small-cap companies are those that employ certain public company best practices.  For some issuers, this will require a fundamental examination of the business, its principals, goals and objectives, for others it will require getting the company’s financial house in order.

Continue reading “3 Best Practices to build an effective IR Strategy” →

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Leveraging the high demand of Community Bank stocks

“The OTCQX Banks Index, a benchmark for community banks traded on the OTCQX market, gained 30 percent in the past 12 months, compared to 15 percent for the S&P 500.  How can community banks leverage this positive trend and deliver greater value to their shareholders? Continue reading “Leveraging the high demand of Community Bank stocks” →

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Stock Promotion – Context, Concerns & Potential Solutions

There is an adage that stocks need to be sold by having their stories widely told.  This is especially important for smaller companies looking to promote themselves to customers and build their visibility with the investment community.

Social networks and online media sites have created new ways for public companies to interact and connect with potential investors.  Digital marketing has made it easier for investor relations professionals to reach millions of investors with the click of a mouse, but it can also be abused by anonymous market manipulators for fraudulent promotional campaigns. Continue reading “Stock Promotion – Context, Concerns & Potential Solutions” →

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How Can We Take the Pain Out of Being Public? Part II

In a previous blog post, I talked about some of the “pains” associated with a being an exchange-listed company today.  Not only does it cost $2.5 million to do an IPO onto a U.S. exchange, it costs on average $1.5 million per year in legal, accounting, advisory and compliance costs to maintain an exchange listing, according to a 2011 study by the IPO Task Force.  And that doesn’t include the value of management’s time and internal resources that are diverted to meet increasingly complex exchange rules and processes – and away from growing the business.

At OTC Markets Group, our goal is to remove the obstacles associated with being a publicly-traded company by reducing costs and complexities for business and investors.  In this post, I outline the three ways we’re helping to take the pain out of being public:

  1. our data-driven market standards
  2. technology-driven information distribution
  3. broker-dealer-based trading model

Continue reading “How Can We Take the Pain Out of Being Public? Part II” →

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Let Public Companies Sell Shares in the Public Markets

“If we want growing companies to go public, we need our public markets to be a competitive source of growth capital. One easy solution is to let public companies sell their shares in the same way they can now buy them back: through brokers directly into their established public markets. Removing the outdated restrictions on selling shares publicly will lower the cost of capital and attract more growth companies to our markets.”

Continue reading “Let Public Companies Sell Shares in the Public Markets” →

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Addressing the SEC White Paper on OTC Equities

The SEC recently published a paper on OTC equity securities on their website. While I am always happy to see more research around OTC equities, I am surprised by the paper’s overly negative and misinformed conclusions about the growth in OTC dollar volumes.

Moreover, I am concerned that these flawed conclusions, drawn from outdated research and a study of a small group of securities subject to investigative requests by the SEC or FINRA, will be used to develop new regulations that harm capital formation.  Regulatory action based on this skewed sample could negatively impact the vast majority of companies that trade successfully on the OTC Markets.

The OTC Markets are More Transparent Today

Continue reading “Addressing the SEC White Paper on OTC Equities” →

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Understanding Blue Sky Laws

The OTC equity market operates within a unique, often complex regulatory environment.  While much of the securities industry focuses solely on federal laws and regulation, the companies, broker-dealers, investors and others comprising the OTC market must understand the impact of state “Blue Sky” laws as well.  Continue reading “Understanding Blue Sky Laws” →

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Why pay-to-play research and marketing makes sense for ‘smicrocaps’

By David Collins, IR Magazine |  Tackling the challenges faced by small and micro-cap companies.

Life as a small or micro-cap public company is getting harder by the day as the pool of buy-side interest is shrinking almost as fast as sell-side research, and sales and capital markets sponsorship is contracting. Accordingly, the ‘smicrocap’ IRO’s task of finding worthwhile targets to pitch and introduce to management also grows more challenging – and, unfortunately, the smaller you are, the harder your job has become.

Continue reading “Why pay-to-play research and marketing makes sense for ‘smicrocaps’” →

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