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IPO Story
Interview with Scott Liolios, Liolios Group Liolios Group is a comprehensive investor relations (IR) firm, focusing on small to micro-cap companies. The firm strives to deliver "company positioning," "investor awareness," and "capital attraction." Clients include Bitstream (Nasdaq: BITS), Peerless Systems (Nasdaq: PRLS), Q Comm International (Amex: QMM) and Versant (Nasdaq: VSNT). Scott Liolios, the founder and president, has over 13 years in the IR industry. Before this, he was the co-founder and managing director of Pacific Consulting Corporation, as well as vice president of Prudential Securities. Scott also started and managed Newport Micro-fund, L.P., a private equity fund designed to make direct investments into small public companies. Scott has a B.A from the University of California, Davis and attended Chapman University Graduate School of Business. Scott spent some time for an interview with Current Offerings. What's the background of your firm? I started as a broker with Prudential Securities where I primarily worked on small-cap holdings and syndicate offerings. Through my early efforts, I became fairly close with several emerging growth companies and became very aware of the many challenges and difficulties small companies face while trying to get the attention of Wall Street. In 1995, I started my investor relations firm with the idea of approaching the market with the mind of an analyst. I believed that if our clients were well vetted and I was selective in the companies I represented, the investors would be very open to following our clients and their progress. We did not want to approach the Street with a "Deal of the Day" or "Deal of the Week". This model has worked very well for our clients. What is the difference between IR and PR? For Liolios Group we define IR (investor relations) as effectively communicating your corporate story to financial professionals such as money managers, investment brokers and analysts. Communication has to be tailored to appeal to these targeted professionals and give them what they need in a concise manner. It's different from Public Relations in that PR usually means getting your products exposed to the proper markets; trade shows, media coverage etc, a more broad approach. IR has a narrow target area; that is, you want to get in front of those that are interested in your company from an investment perspective. Also you've got to maintain communication with all stockholders to maintain the existing base as you add shareholders through exposure throughout the investment community. At what stage does a company look for IR? Is it before an IPO? Companies typically seek IR at various stages. Many times their story has changed and needs to be exposed to new potential investors. Perhaps the company is seeing an increase in demand for its products or is moving into new markets and needs to inform investors. Presently many companies are coming to us because they need new Wall Street relationships to renew interest in their stock. We develop a comprehensive IR campaign and get them in front of new analysts that could potentially issue research coverage and expose them to brokers and portfolio managers that without us might never discover the company. It is also important to engage an IR firm prior to IPO to develop a professional and concise presentation and to ensure a successful road show. Once the stock begins trading a company will also want to broadest all possible audiences to get shares in many different hands beyond only the selling syndicate. What's an example of how you helped a company in terms of IR? Our client Telecommunication Systems came to us in June of 2003 with no research coverage, trading 30k a day not far from its 52 week low. Presently they have 3 analysts covering the stock and average 300k per day with the stock up more than 300%. Institutional ownership is over 21% from 8% when we started. The company has performed and executed well on their plan. We've made certain that the Street has followed their progress. Much has happened in terms of securities regulations. How has that impacted IR for companies? Regulation FD has made it essential for companies to constantly communicate detailed aspects of their business to Wall Street. It has been one of the most influential changes in the securities industry in the last several years. Although it has stifled the communication of some companies, we view Reg. FD as an opportunity and we encourage our clients to disclose more rather than less. It clearly shows how valuable an IR team is to a publicly traded company. |
