Cancellation of presentations at investor conferences is often considered a negative trigger for company shares, as investors
believe there is no smoke without fire.
As recently as on November 4 this year, Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) shares were pounded intra-day after the company cancelled
appearances at a Credit Suisse conference and on rumors that the company could delay the filing of its financial statements.
The stock did recover at the end of the day, however.
Benzinga set out to explore why a cancellation is treated with contempt by investors, although in some cases, canceling could be
due to innocuous reasons.
What Is An Investor Conference?
An investor confidence is a platform for
companies to sell themselves, their products, ideas, business ventures, etc. to investors. An astute investor can use the event to
scout out meaningful data and insights that could help him in his investment decisions. Usually, investor conferences are organized
by a company in conjunction with sell-side analyst firms that cover the company.
Why Companies Cancel
- The company may have some negative news swirling around and may not want to face the wrath of investors, having to answer
their unpleasant queries. This happened with Lumber Liquidators Holdings Inc (NYSE: LL) in March 2015 when it was mired in a controversy over health and
safety violations.
- Companies may have some market-moving announcements such as
M&A, capital raising, etc., to be made around the conference schedule.
- The company in question may have some pressing agenda around the time that could take precedence over the benefits of meeting
with its investors.
-
Geopolitical factors, including natural calamities, may also lead to "no shows" at investor conferences.
- A presenter, often a key executive slotted to make the presentation, may be unable to attend
due to personal reasons.
Another Take On Cancellations
Regulatory requirements necessitate that companies disclose information, which may be broken at a presentation, often ahead of
the presentation. Usually, a press release is sent containing all key points to be highlighted in the conference. This obviates the
need for a full-fledged presentation, although there are arguments that the experiences garnered by the conference atmosphere, such
as a break-out sessions , offer meaningful insights not
provided by press releases alone.
All said and done, investors are left lacking, particularly regarding information and nuances, when a conference attendee
cancels.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.