Very often, when I'm working with a client to help them simplify their story into easily digestible bullets, they say to me, "our existing investors already know this...why do we need to say this again? It feels so repetitive."
And when I explain to them why, the light finally goes off for them.
Your existing investors already own the stock and are not going to be the incremental buyer(s) that make the stock go up from here. Sure, could they buy more? Maybe… but it's likely to be only marginally incremental to what they already own and maybe they're already "full" and won't buy more until they have more assets to invest.
They might also want to see the stock work a little bit before they buy more (however silly that sounds… but investors generally like to add to positions that are working, rather than worry that they're throwing good money after bad).
But you need to think of investor relations like owning a restaurant. You have food to sell… and you have seated diners that are already in your restaurant (these are your investors in my metaphor). By the time you get to dessert, they're full… but what happens when you still have a kitchen full of food? You need more patrons to come into the restaurant to consume the food you have for sale. If you spend your time focusing on your existing diners who have the check on the table because they're full, and you ignore the people walking around outside who are hungry and looking for someplace to eat, you're wasting your time. Telling someone with a full belly what your specials are tonight isn't going to get you anywhere.
The reason you need to tell, and retell the story over and over again is that in order for your stock to work, you need to consistently have new investors discovering you, finding your story interesting, kicking the tires, and ultimately buying the stock. Just having your existing investors already know and like the story isn't sufficient. In fact, I'd argue that only catering to your existing investors (while ignoring the need to bring in new ones) would lead to a declining stock because over time, investors get bored with what they own and if it isn't working, they use it as a source of funds to go buy another stock that is working.
Don’t get me wrong… telling your existing investors what’s going on is critically important. But they already know the story and are interested… so you can give them updates while ALSO retelling the story to new investors. Not to mention, your existing investors will want to talk with you in a follow-up call. You can answer their “PhD-level questions” while still also catering to the “101 crowd.”
So… when you sit down to write your next quarterly transcript, think to yourself, "am I talking only to my existing investors who already know the story and who are looking for minute, incremental updates, or am I telling the story to everyone so that even a new investor can pick up this transcript, know what my business drivers are, and see me for the interesting company I am."