When Investor Conferences Go Virtual (And Why That's A Good Thing)

It’s not a secret that the U.S. stock market is dominated by institutions. As recently as 2017, 80% of the S&P 500 was owned by institutional investors, according to Bloomberg.

But the large gap between institutional and retail investors—in everything from technology, to market ownership, to influence—has closed in recent years. The rise of passive funds and robo-advisors has made access to markets cheaper, and technology has certainly made it easier. SEC Chairman Jay Clayton noted last year that 56 million U.S. households own at least one U.S. mutual fund—that’s 44% of all households.

One of the last frontiers to be opened up to the retail side of the market however is participation and engagement with management. Public companies no longer go on roadshows to engage with individual investors like they once did. And despite a 24/7 news cycle, management commentary is mostly limited to industry conferences and quarterly earnings calls, the vast majority of which do not allow for retail investor participation.

A Virtual Solution

Trying to fill that void is Virtual Investor Conferences, or VIC. The online investor conference series replicates in-person conferences by connecting investors with senior executives at public companies. Since launching in 2010, VIC has hosted more than 150 events with nearly 1,000 public companies. Due in part to this success, it was acquired by OTC Markets from Cision in January 2019.

“At the time, there was an emergence of event companies utilizing online platforms to replicate the look and feel of a traditional physical conference,” said John Viglotti, who has been with VIC since the beginning and is now SVP Corporate Services, Investor Access at OTC Markets. “What was missing was access to these conferences for the individual or retail investor. We saw an opportunity to create a community of investors and a platform for companies that facilitates that large-scale engagement.”

Virtual Investor Conferences grew out of the desire of investors to obtain access to executives, and the desire of executives to share their stories with investors, Viglotti said. Today, it’s not uncommon to have 1,000 - 2,000 or more investors attend a single conference. Each presentation is also archived for 90 days.

Most of the companies that present, he said, are either micro/small-caps or large international companies that trade in the U.S. via an ADR. For international companies, the conferences are a way to market themselves to U.S. investors. For small caps, it’s about appealing to their shareholder base. According to the SEC, companies with a $250 million market cap or lower are, on average, 70% owned by retail investors. That figure rises to 80% with companies under $100 million in size.

“Historically, for the parties that do host traditional conferences, a large component of that is the face-to-face interaction. But those audiences are usually restricted to institutional investors,” said Viglotti. “It’s worth the cost and time for an issuer to engage with a handful of the right institutional investors. But if their interest is to engage with the retail side, issuers are looking to engage with a much larger audience.”

VIC has 20 events scheduled for this year (double the amount from 2018) featuring companies from the cannabis, biotech, financial, energy, and mineral sectors. Conferences will typically have some sort of theme, such as industry-specific or based upon market cap.

Ironically, the company that started out as a way to give retail investors more access to companies has also had success attracting investors from the institutional side. Viglotti said today they have between 6,000-7,000 institutional investors registered for conferences.

“What has happened over time-- given the frequency of our events, the volume of public company presentations and various industry focuses, is that we have attracted the institutional investor and wealth management communities because they no longer have to leave their office to engage with the C-suite of prospective investments.

The next scheduled Virtual Investor Conference is the OTCQX Community Bank Conference on Sept. 26, which will feature presentations from executives at 10 OTCQX community banks.

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