Many public companies from outside Germany (especially Canada) have a second/dual listing at one of the German exchanges: Frankfurt, Stuttgart, Berlin etc. But is it worth it? There are huge numbers of stocks with no trading volume at all, they are neither known to institutional investors nor to private/retail investors. In this cases, the listings are useless.
But how can you make your German listing useful?
Of course listings can be worth a lot, if – and only if – they attract new investors. But these investors – and that is something many people do not get – do NOT come because of the listing. Investors come, when they like your equity story and when they get to know you. And then, in the second step, it is helpful to have a listing.
Therefore I suggest: First, think of how to attract investors. Second, think about the listing.
If you already have the listing, think about IR/PR work.
Do not forget the retail investors
Today, I would like to say something about German retail investors: Even though, German people are not the keenest investors in the world (based on the number of shareholders on a per capita base), there are about 4-6 million retail investors in Germany, which usually are interested in stock picking.
Various capital measures in the past have shown, that small and mid-cap stocks can raise significant sums of money when using measures targeted on private investors. There have been major success stories from German mid-caps – think of the so called “Mittelstandsanleihen” (i.e. midcap bonds) which often placen 2-10 Mio. Euros per bond with retail investors.
Many foreign companies – especially from Canada – already recognized how valuable German retail investors are. There are quite a few – but still a minority – of these foreign small-cap companies which managed to get major trading volume from retail investors in their stock, like Canada Zinc Inc., Alberta Oilsands Inc., Zecotek or Vendome Resources.
But maybe, the even better examples are companies like ADMD, which – even though they have no listing in Germany – do successful IR/PR work specifically focused on German retail investors. And of course: There is a huge loss of impact if you allow these investors only to trade your shares at the Nasdaq OTC.
What makes the difference?
The success stories mentioned above do not come by chance. To reach multi-million Dollar trading volume or capital increases requires proper well targeted IR/PR work, which not only consists of a good equity story. From personal experience I can tell: Even more important is the choice of the right marketing measures to bring your exciting equity story to the right audience.