THE Biotechnology Industry Organization (BIO) in the United States and Thomson Reuters released a report last week containing an interesting data point about how analysts and portfolio managers view the usefulness of corporate investor relations websites.
The study (PDF 648KB, 37 pages) found that IR websites ranked second-last for importance among a list of nine sources of information that analysts use in their research.
The table below is taken from the report and shows just how poorly company websites stack up (click to enlarge):
There are a couple of points I would like to make about this finding. The first is that it doesn’t surprise me one bit because health care sector companies as a group have long had the weakest investor relations websites.
But Thomson Reuters hosts most biotech firms’ IR websites
The second point is that Thomson Reuters itself actually hosts and manages the vast majority of biotechnology companies’ IR websites, from mega-cap Amgen to micro-cap Zila, Inc, and a huge swathe in between. This fact is conspicuously absent from the report.
Of course, it’s not in Thomson Reuters’ interests to point out that it actually charges biotechnology companies big annual fees to host and manage the very cookie-cutter IR websites that analysts and portfolio managers gain little value from.
Instead, Thomson Reuters seems to suggest that the culprits are those few companies that are not using its website product. To emphasize the point, Thomson Reuters says stats at its disposal – via its StreetEvents service and the IR websites it hosts — show that analysts are using them more frequently.
That might be so, but increased traffic is not an indicator of increased satisfaction. Indeed, if investors aren’t getting what they want from these sites, then visiting them more often is likely only leading to increased frustration and negative perceptions.
It concerns me greatly that Thomson Reuters isn’t willing to face up to the facts and acknowledge its role in failing to meet investors’ corporate website needs.
Because until they own up to the problem, they won’t do anything to fix it.