interesting article....
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SILENCING THE CHATBOARD CRITICS
Invite them to drop in
Scott Adams
Financial Post
When Robert Heath took over as chief executive of Triant Technologies Inc. in 2001, the posters on the Internet chatboards used to beat the company up.
At first, Mr. Heath's response was to turn cheek and ignore the chatboards, but gradually he learned that he couldn't.
"I was absolutely alarmed with what was going on there," he said. "The majority of the stuff that was being discussed was completely erroneous. It wasn't a good state of affairs.
"But I could also tell there was a tremendous appetite for knowledge. It wasn't that people were being belligerent or misleading intentionally -- there may have been 1% of that -- but I think there was a genuine desire to find out what the hell was going on at Triant."
So Mr. Heath quietly let it be known that he would take calls and e-mails from investors and that they could visit Triant, which develops equipment monitoring and fault detection software, mainly for makers of semiconductors.
"A lot of people discount the bullboards and treat them as trivial gossip and I just took a different approach to it. I let it be known that I'm available."
Internet chatboards are known for being such a forum of lies and speculation that the immediate impulse is to write them off. But it doesn't have to be the case.
Retail Triant investors turn to the chatboards because the company is followed by just one brokerage that markets its research to institutional investors.
Triant is still small and it's difficult to attract coverage in a time when technology stocks are out of favour. The company is also cashed up, meaning it had enough cash for many quarters. Analysts weren't interested in following the small semiconductor equipment software company without the prospect of a stock offering and the fees that would come with it.
In effect, the chatboards became a substitution for analyst coverage. Mr. Heath doesn't post on the chatboards himself and he obviously doesn't provide insider information to those that call or e-mail him. But he does provide colour and insight into the company and industry events.
The result has been a turnaround in chatboard content. "Generally, right now the information posted there I would term much more helpful," he said.
Christopher Robinson, a retail investor in Victoria and Triant shareholder, has spoken to Mr. Heath on a couple of occasions.
"He's not only accessible, he seems to be understanding and well informed," Mr. Robinson said. At least once, he has spoken to Mr. Heath and then typed up a paraphrased script of the conversation for the chatboard.
Although chatboards still can sway trading on small-cap stocks, few companies reach out to the participants as of yet.
"For the most part, I would say that CEOs do ignore the boards," said Cory Pala, managing director of E-vestor Communications Inc., a firm that specializes in investor relations for small-cap technology companies.
But the Internet forums still have their use for small companies, he said, noting that one of his clients, CSI Wireless Inc., has some posters that are well informed on the industry.
During the Internet boom, institutional investors would often check chatboards to try to determine what retail gossip or emotion was driving stocks. That's rare now, except perhaps in the case of small-cap stocks that lack analyst coverage.
"As long as it [information on chatboards] is taken with a grain of salt," said Peter Hodson, small-cap portfolio manager with Synergy Mutual Funds, "you can still find some interesting information on companies that aren't covered by the Street."
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