Paul Holmes 19 Apr 2001 // 11:00PM GMT
Following the spin-off, the market value of the Media 100 as a Company dropped 50%, in sympathy to poor results reported by Apple Computer, causing Media 100 resellers and end user customers to delay purchases. In 1998 management announced a plan to increase engineering spending and re-direct the focus of the Company, subsequently distancing itself from Wall Street. Media 100 had low trading volume, lukewarm sell-side analyst sponsorship and was categorized by Wall Street as “under followed and under valued”, when really the company was misunderstood. A year later, in the third quarter of 1999, Media 100 completed the acquisition of Terran Interactive, a streaming media company located in Silicon Valley, and Media 100 re-emerged to meet with investors, analysts and fund managers.
Since the acquisition, Terran’s results have added revenue and earnings to the Company’s operating results and gave Media 100 its start in the Internet video market.
Media 100, Inc. had three objectives in mind for the PR component of re-emerging to meet with investors, analysts and fund managers:
- To position Media 100, Inc. in the U.S. investment community as a dynamic, high-growth company that successfully met its financial and operational projections as it transformed its product line from a Mac environment to a Windows NT environment.
- Increase Wall Street’s awareness of the Internet video market, particularly the streaming media capabilities of an emerging “mircro-cap” company, which would limit the number of institutions that can invest and would require an active retail/broker program.
- To increase existing and prospective audience interest in MDEA’s stock, emphasis would be placed on the Company’s investment potential so that it was accurately reflected in the stock’s value.
The audience for this public relations campaign included all buy and sell-side professionals and influencers including:
- Buy and Sell-Side Analysts
- Fund Managers
- Investment Bankers
- Financial Media
Competitive Analysis – Because the digital video and streamlining media market is constantly changing, it is difficult to predict future sources of competition; however competitors are unlikely to continue to include larger vendors such as Apple Computer, Matsushita and Sony. Many of these companies have substantially greater financial, technical and marketing resources than Media 100, Inc. Another major competitor is Sonic Foundry (Nasdaq: SOFO). However, one of the stumbling blocks with Media 100 is that they cater to so many aspects of the Internet community. Media 100’s competition can be considered complimentary in some cases, and in some cases not.
Consumer Analysis - Consumer Response to Media 100, Inc. was positive. Through positioning Media 100 as digital video “pure play,” Media 100 Inc.’s products have redefined the digital video industry by making content creation easier, more productive, and more affordable for the traditional video customer.
Shandwick had to re-formulate key messages for the Company’s investor presentation that had not been updated since its original roadshow. First, Shandwick had to add multimedia and video components that were not previously included for a more impressive slide show. Emphasis was placed on favorable industry trends and MDEA’s growth strategy and successful execution. Based upon these messages, the goal was to re-introduce the management of Media 100 to Wall Street (after a year of “hibernation”), specifically to new sell-side analysts who could approach the company story either from an Internet and/or multimedia perspective. Upon completion of the presentation, investor meetings were arranged for Media 100 management in New York City to introduce the investment potential of MDEA technology and trends in video streaming, as well as position MEDA as the company best positioned to gain. Three days of meetings with existing and potential new investors were orchestrated surrounding the Kagan Streaming Media Conference in New York.
Earnings Reports: Assisted the company with announcement of quarterly earnings, which represented the Company’s 5th consecutive quarter or profitability. Year-end earnings announcements were timed with investment community and financial media interviews to heighten news value of management’s visit.
Interviews: Interviews were set-up with key print and broadcast financial media to establish MDEA’s CEO, as a spokesperson for the streaming media industry.
Press Release Distribution: Product, announcement and earnings releases were aggressively distributed.
OBSTACLES AND EVALUATION
There were several challenges that Shandwick had to address. One of the main challenges was that Media 100 had a mircocap status that was currently under $50 million. This limits the number of institutions that can invest. Because Media 100, Inc. had a small float and desultory trading volume, less than four million shares are freely traded. Smaller volume discourages large institutional positions.
Since Shandwick implemented its communications program in August 1999, MDEA share price moved from its low of $4 13/16 to a 52-week high of $46 13/16 on March 23, 2000. Media 100, Inc. was quoted in Bloomberg as a “strong buy” by analyst Gene M. Holmstead at H.C. Wainwright seven times in a nine-month period. Secondly, there was lack of sell-side analyst support. The number of both buy-and sell-side participants was doubled on the quarterly conference call that was conducted. Shandwick continued to involve investment bankers and analysts by inviting them to visit MDEA’s headquarters for a product demonstration and review of current events at the Company.
Coverage resulted in most of the major newspapers, top trade and industry publications, as well as the world wide web including: Associated Press, Bloomberg, The Boston Globe, Bostoninternet.com, Business Week, CBSMarketwatch.com, CNETnews.com, Individual Investor, Internetnews.com, The New York Times, Radio WallStreet, Red Herring, San Jose Mercury News, Upside Magazine, Upsidetoday.com, Video Systems, Wall Street Journal and The Washington Times.