The Virtual Storyteller

June 19, 2006
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GRAND RAPIDS — Historically, senior management presentations have only been available to institutional investors. But that's changed now, thanks to a startup company called PDBconnect

A couple of years back, PDBconnect owners Bob Dentzman and Flip Mulliner came up with the idea of professionally producing senior management presentations as a way to give public companies more exposure among institutional investors.

A "virtual management presentation," as they call it, is typically a 30-minute presentation that covers all the content of the company's standard analyst presentation. It's posted on the company's Web site for investors to view at their leisure. In the presentation, officers of the company talk directly to existing and potential investors about the company's business model, its background, products, markets and financial results. The virtual format allows viewers to click around as they please through different sections of the presentation.

For the investor, it's like having a private audience with the senior management team. For the management team, it's like having a one-on-one conversation with the world.

Mercantile Bank of West Michigan bought the concept and launched a virtual presentation on the investor relations page of its Web site on Sept. 30 last year. Thus far, it has had about 3,000 "hits," or viewings, Dentzman said.

Mercantile Chairman Gerald Johnson Jr. said the presentation remains accessible via the bank's investor relations page, but the company just put a link to it on the home page, as well.

"That made a significant difference," Johnson said. "People can just hit the home page and there's a picture of me in the lower right hand corner that they can click on without having to go anywhere else."

On April 26 this year, Mercantile's virtual presentation was posted on the BetterInvesting Web site, giving the company exposure to 35,000 investment club leaders and 161,000 retail investor members. Then, about one week later, it went up on the Nasdaq investor center Web site.

Over the past nine months, Dentzman and Mulliner have been working with Nasdaq on a potential business plan to pilot the virtual presentations of Nasdaq companies. The men have also been working at building distribution for the presentations and tracking their viewing metrics.

Dentzman informed Johnson earlier this month that Mercantile's presentation had more than 1,250 viewings lasting an average of 11 minutes on the BetterInvesting site and 100 viewings on the Nasdaq site. The Nasdaq viewings were mostly from institutional investors, which is exactly what Mercantile is looking for, Johnson said.

"I think the number of viewings and the duration of viewings is encouraging," Johnson said. "I've talked to a number of people who have seen it, and I've had numerous compliments on it. A number of our institutional investors and our investment bankers have mentioned that they looked at it, too. I think it's accomplishing what we wanted it to."

Dentzman said it's exciting to start seeing the kind of viewing metrics Mercantile is generating on its BetterInvesting and Nasdaq postings.

"That's where we think it will really become a more compelling value proposition for prospective clients — showing that you can reach out to a couple hundred thousand retail investors cost-effectively," he said.

Before Mercantile, PDBconnect had done a similar Web presentation for Spartan Motors Inc., a Charlotte, Mich.-based manufacturer of custom motor home and fire truck chassis and emergency-rescue vehicles. Spartan Motors posted its virtual presentation on its Web site in November 2004.In the last year, the presentation has had 11,000 viewings that have averaged 15 minutes per viewing, Dentzman noted. This week or next, the Spartan Motors presentation will launch on the BetterInvesting site, too.

Universal Forest Products Inc. has talked with PDBconnect and is considering a virtual presentation, but had not made an affirmative decision as of last week, spokeswoman Lynn Afendoulis acknowledged. A PDBconnect-produced virtual management presentation has a price tag of $37,500.

The BetterInvesting site touts virtual management presentations as "the latest way CEOs and investor relations professionals are choosing to deliver their company message to investors." Such presentations make studying a company "simple and insightful," according to BetterInvesting.

PDBconnect is talking to other companies about the concept, so Beth Grudzinski, a relationship specialist with BetterInvesting, anticipates more companies will follow suit.

Grudzinski said about a dozen members have contacted the organization in regard to Mercantile's virtual presentation. They saw it as a "new way to look at a company," and remarked that the presentation was insightful and easy to navigate through, she noted. She said they also appreciated the obvious effort the company took in putting the presentation together.

A company interested in producing a virtual presentation and having it posted on BetterInvesting.com has to contact the organization about becoming a corporate member, Grudzinski said. The criteria for membership is that the company is publicly traded, has at least a five-year operating history and a stock price of more than $1. There's also an annual membership fee, which varies depending on the company and the programs and products it chooses to participate in, Grudzinski noted.

"For the company seeking investors it's a great tool, because it allows the president, CEO and CFO to be in front of people they might not otherwise have the opportunity to because of travel schedules and whatnot," she said. "I think for our individual members it's a great tool, because they're learning about a company they may never be exposed to otherwise."

Grudzinski said the Mercantile presentation will stay on the Web site for six months. After that the company will have to review the presentation and make necessary financial updates. Once those are made, the presentation can be reissued and posted again on BetterInvesting.

In addition, PDBconnect recently produced a seven-minute streaming ad for Nasdaq that introduces the stock exchange's CEO signature series.

"Our belief, and that of Nasdaq and others we have been talking to, is that this kind of tool could also be very instrumental on the IPO and pre-IPO front as companies are trying to create better investor visibility," Dentzman said. "Clearly there are SEC rules and things of that nature that you need to comply with. But when companies go out and do road shows as part of the IPO process, as a rule it's very difficult to hit all the cities, and it can be grueling."    

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