Stock promotion is a technique to boost the demand, at the same time, increase the value of a company’s stocks. It involves different techniques which usually results to an artificial demand for the stock. It’s also a great way to catch the attention of investors and encourage them to participate in the stock trade.
The stock promoter is the one doing the stock promotion for a certain company. Stock promoters use the traditional and modern means of promotion to endorse their client’s stocks. They also make agreements with several media and stock awareness groups in order raise the exposure of the stocks. Due to the advancement in technology and the presence of the Internet, it is now easier to do stock promotions, as well as form campaigns to get investors interested in the company.
So what does do these people do exactly? They perform the same function as a marketing arm. Mainly, they get paid with a flat fee or with company stocks, which he acquires at a discounted rate. Great promoters function like salesmen but their level of interaction will be with the investors, media groups and big-time investors.
If you’re looking for one for your company, what qualities should you look for? For starters, look for a promoter with relevant experience in your industry. If he knows your industry, he will know the ins and outs of your business model and be able to hit the ground running. Since we are in the Information Age and everyone uses the internet to communicate, it is an advantage to get someone who is knowledgeable in online solutions. To reach a high trading volume and to push the stock up, it is very essential to keep others aware about your company.
Competent promoters also have a good relationship with their clients and investors. For starters, they make sure to keep their clients and investors updated with the changing situation of stock market. They don’t simply pressure their clients to buy because of hearsay; they also show the hard facts about the future prospects of the company by showcasing the company portfolio, financial statements, and stock trends.
These promoters should provide stock profiles and fact sheet about the stocks that they are promoting. More importantly, they should focus on information-providing services like message boards, investor consulting, email newsletter alerts and updates, fax marketing, press releases, and conference call meetings to highlight the past performance. This is to create a strong demand for the stock.
Though stock promotion is a great option to increase your company’s stock price, it can also cause your company’s downfall. This usually happens if your promoter uses unethical promotion methods. Misleading press releases by your promoter could really push your stock prices downwards. So, make sure that you have checked your stock promoter’s background before hiring them.
Lastly, although a majority of the companies who do stock promotion are small, low trading volume companies, it doesn’t necessarily mean that big corporations should not involve themselves in stock promotions. More often than not, these big companies also need to promote their stock in one way or another in order to have a good public image to investors and to active traders in the market.
The writer of this piece has located a corporate finance expert named Josh Yudell. Josh Yudell is the CEO of a large and well-respected investor relations firm and has run market awareness campaigns for hundreds of public companies. Josh Yudell resides in NY City.