Originally Published January/February 2001

Maintaining open communications can keep shareholders happy—and dollars flowing.

Joanne Stephenson

It never ends. From the initial public offering to the latest product offering's anticipated effect on the bottom line, investors want to know what a business is planning—and they want to hear that information directly from the company. Medical device companies' investor relations strategy should be threefold: 1. Communicate. 2. Communicate. 3. Communicate.

In the short term, clear, honest, and well-thought-out communications can help companies' financials. "A company that doesn't provide meaningful information to investors will face a significant discount in value," Michael A. Rocca, CFO of Mallinckrodt Inc. (St. Louis), told MX earlier this year. "Companies can lose 1 to 2 P/E points, or more in some cases, simply because they are not providing adequate information." In the long term, having trusted, well-maintained relationships with investors will stand medical device firms in good stead when the inevitable, unforeseeable problems or delays occur.