Five tips to manage The Code in front of The Company

It is clear that every ASX company is actually two independent businesses. Let me explain.

Firstly, there is the Operational business. This is the challenger bank, the gold explorer, the Regtech scaleup. This is what we normally think about as The Company, but in reality is just one side of it.

You have a product, customers, supply and demand, marketing, growth and people. You have a budget and (hopefully in this market) enough capital to cover those expenses.

This is your baby, your legacy, what you are known for.

Then, there is the second business… The three letter ASX Code: NOV, TSO, RAC, QEM, and ~2,400 others.

This is a different kind of business, and whilst linked to your operational business, requires a different type of thinking and strategy. This is because the constituent parts are so different:

• Your product is now your shares
• Your customers are now investors
• Your competitors are now 2,400 other listed companies - everyone wants that same $50k from investors’ pockets
• Your growth is a chart
• Your marketing is now called Investor Relations; and
• You should definitely have people dedicated to it.

This change in perspective requires more than a cursory agreeable nod. The implications of it are vast, and include the requirement for a bespoke strategy and plan for your second company, “The Code”.

The problem for investors is when they log into their broker, they only see the price, the chart, and maybe a Morningstar rating. Your goal is to enable investors to see the company beyond the code. You need a plan to engage investors, communicate effectively, and make sure they know that the buying and selling of your stock has a direct impact on the mission you’re chasing.

5 tips to nail “The Code”

1. Take internal responsibility
Yes, external IR is valuable, but it should not alleviate responsibility. There needs to be a CEO of the code and people working on it. You could have internal IR/marketing dedicated to this, or have an ED/C-level focused on it like we have seen at Race Oncology, Recce, Prospect Resources, and Ansarada.

2. Have a budget
You have an insane amount of competition here. Everyone wants the same investor money, and like all sales and marketing plays you need to be out there, visible, approachable, engaged. This takes time, and it takes money. Have a budget, align it to your share price, and measure it on a return on market cap or capital raised.

e.g. if you want to raise $20m in the next 3 years think about what you want to spend on that to both (1) increase the chance you will get it, and (2) increase the price you will get it at!

3. Understand your buyers and sellers
Most people concentrate on the 1% of investors who don’t sell - your Top 20.

This feels like a good use of time - and it is - but don’t forget about that long tail. They are the ones buying/selling on market, they determine your share price, they determine your raise price and how much you can get from those bigger players

4. Communicate at scale
You can 1:1 your Top 20 - but not the remaining thousands of shareholders. Work out how to build a community around the Company. Get email addresses, record videos, get comfortable with this because it saves you time and makes you money! This is the high ROI work of engaging your Code customers - aka. investors.

5. This is a self-fulfilling prophecy
Engagement drives share price
Higher share price leads to a bigger raise at a better price
A bigger raise leads to a higher chance of success thru more “shots on goal”
More success leads to a higher share price

Repeat.

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