01 · Challenge
The Challenge
Despite consistent 20% growth and sustained profitability, Issuer Direct was trading at less than 10x earnings with limited institutional support. Its stock was unlisted and quoted on the OTC Bulletin Board, with a $7M market cap, fewer than 3M shares outstanding, a float of just 2M shares and low average dollar trading volume. The company was seeking communication strategies that would attract long-term, value-oriented investors and bring its valuation more in line with its peers.
02 · Solution
Our Solution
- Performed a valuation analysis supporting a base-case market value more than 300% above the then-current trading price, illustrating the upside and the stock’s undervaluation based on historical performance
- Developed messaging to justify a stronger valuation relative to peers
- Provided guidance on the quarterly earnings process to show the relative discount to peers and the company’s ability to sustain its historical growth
- Planned and managed roadshows to New York, Dallas, Boston, Baltimore, San Francisco, Chicago, Milwaukee, Minneapolis and Los Angeles
- Secured investor conference invitations from Benchmark, B. Riley, Craig-Hallum, LD Micro, MicroCapClub Leadership Summit, MicroCap Conference, Roth, Sidoti and Taglich Brothers
- Advised the board on capital allocation strategies, including dividends versus a share buyback, and stock splits
03 · Impact
The Impact
- Stock was uplisted to a national stock exchange, NYSE MKT
- Market cap grew from $7M at engagement to ~$95M, with the share price rising 668%, from $3.61 to an all-time high of $27.73
- Average daily dollar trading volume increased 735%
- Expanded the institutional investor base from under 5% to 36%
- Introduced a direct investor who partnered to fund an acquisition that more than doubled revenues
Past results are not indicative of future performance. Figures are as reported in Hayden IR’s case study for Issuer Direct Corporation. See our disclosures.
