The source of a company's fund can be creditors which are the banks or the investors who are the stockholders in the firm. The funds borrowed from creditors is termed as a debt and is a liability to the company whereas the investors money is accounted as the stockholders equity and company has a smaller liability towards the investors which makes investors very important for a firm.
It is natural that when an investor invests in a firm he expects a good return for his investments and hence it is the duty of the firm to enhance the stockholders' value. But sometimes when the company is not in a good shape or a new comer it is very difficult to attract and retain investors and to fulfill this goal it needs to have a healthy relation with its investors and hence investor relations come into play.
A deterioration in investor relationship could jeopardize a company's stability and its stock position. A company would lose its current investors and would fail to attract new investors and this could sink the stock prices of the company and make its future dull.
In order to retain investor relation the company should communicate with its investors effectively through media like websites, annual reports etc. A company should update its investors about its new innovations, projects and investments.
Well Job done ! Man ! It's indeed a very informative and the way you upload the Google Investor Relations is just superb. After all, Company's main aim is to enhance the value of share holders. In the modern era, where ownership is separated from management, Investor relation is crucial for any management. They can use, as you explained various medium to communicate to the investors.
ReplyDeleteBasically, in addition to own fund, the company has to borrow fund from the general public such as banks, and investors. Therefore, the firm needs to build good reputation and image in the market, and maintains investor relations by a wide variety of activities and media. On the other hand, in changing business environment investors expect to attain good return from their investing the company. The stock price is critical element for the corporation to attract investors. If the company could gain more fund from investors, it would create more new products and services to expand its market share and increase profit. The company should build good channels to communicate with all investors quickly and make investors understand the missions and goals of the company which they invest. Consequently, the corporation will attain more funds to extend market share while it establishes good investor relations and meets investors’ expectation in the marketplace.
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