Whether Good Or Bad, Give Investors News They Need
Eric Cerny doesn’t always tell investors what they want to hear. But as head of investor relations at GameStop, the 1999 Harbert College finance graduate tells investors what they need to hear.
“One of the most important roles of investor relations is to be very balanced, very calculated and very measured in how you share news with shareholders, analysts and business partners,” Cerny said. “The performance of the business, sales, earnings, operating margin, whatever it is … should drive the stock. As the messenger, you’re there to say, ‘Hey, this is what drove the business today, this is what we think will drive the business in the future, and don’t get carried away.’ You have to under-promise, over-deliver. That’s the best way to go about communicating a company’s IR story.”
Investor relations professionals ensure that clients are provided with enough data to make the best decisions, which is usually to buy or to sell.
Cerny, who spent nine years in investor relations at Abercrombie & Fitch, JCPenney and Fossil before coming to GameStop in 2017, said it’s best to simply present the facts and allow the reader to form their own opinions based on the information presented.
Even good news isn’t always an easy story to tell.
“With good news, you also have to be very careful,” said Cerny. “To be candid, you have to be more careful because people can get carried away and think it’s going to run forever. You want to make sure that you’re very careful in how you highlight the positives, highlight the negatives and take a very balanced approach.”
Although storytelling must be balanced, investors and business are anything but static. The social media-driven fluctuations in GameStop stock this year are just one example.
“Investors, and the way people go about investing, has changed,” Cerny said. “Even if you’re an institutional investor that works for Fidelity or any of those guys on Wall Street, the methods in which you’re researching companies and understanding what’s working for different industries is changing. Why? Because you’re paying more attention to social channels, and you’re paying more attention to the way consumers react and interact with brands.”