Door to CEO suite opens a bit wider

A company dedicated to giving retail investors the kind of access to public companies usually reserved for Wall Street insiders could get a boost from the No. 1 discount broker.

Stephen Chanecka, president of Rosevillle, Calif.-based Informed Investors Inc., says that San Francisco-based Charles Schwab Corp. plans to partially sponsor several of the 30 or so investor forums that his company will host this year.

The Securities and Exchange Commission has been pushing for some time to put retail investors on equal footing with their institutional counterparts.

If the sponsorship materializes, it would be yet another sign that the movement is gaining steam.

A Schwab spokesman, however, would say only that “nothing has been signed yet.

“Schwab has participated in these forums in the past and we will continue to participate in them in the future,” the spokesman said, declining further comment.

doubling its events

Informed Investors gives retail investors the chance to talk with the management of public companies. Its number of forums has about doubled in three years.

“These forums give investors a chance to interact with management and see the whites of their eyes,” says Mr. Chanecka of Informed Investors, founded in 1993. “It’s really a quantum leap from reading an annual report.”

For years, industry conferences hosted by securities firms have given companies a way to communicate easily and regularly with institutional investors and analysts.

But retail investors historically have been left out — a situation SEC Chairman Arthur Levitt is pushing companies to change.

The SEC proposed a regulation in December that would require companies to disclose information that can affect stock prices through public channels rather than limiting it to Wall Street insiders.

Mr. Levitt also urged corporations to open up conference calls to all investors. “Place them on the Internet,” he said. “The basic principle of fairness deserves no less.”

The proposal, Regulation FD (for Fair Disclosure), was opposed by the Securities Industry Association, the trade group for brokerages and investment banks. The public comment period ends March 29.

Meanwhile Informed Investors will continue its forums, which are growing in popularity among both companies and investors.

Most recently, the company held the Fourth Beltway Biotech Forum in Bethesda, Md. The seven companies that participated included Entremed Inc. and Martek Biosciences Corp., both based in Maryland.

The forum “gave Entremed an opportunity to extend its [investor relations] reach to a targeted sector of the retail community,” says Mary Sundeen, Entremed’s spokeswoman and head of investor relations.

Informed Investors secures the space for the forums and handles the marketing. Participating companies only need to show up — and pay a fee, of course.

“The turnout was pretty spectacular for a local event,” says Peter Buzy, chief financial officer at Martek. “It was very effective in getting Martek’s name in front of a local audience.”

While no movement in stock prices has been documented following a forum, Mr. Chanecka says trading volume typically goes up for the attending companies’ stock.

With an average of 150 investors in the audience, each company’s presentation lasts about 35 minutes followed by a 10-to-15-minute question and answer session.

On top of those who attend, more than 1,000 investors around the country access each forum on the Internet through Yahoo! Broadcast Services, both in real time and after the fact through an archive.

The typical forum attendee, according to Informed Investors surveys, has household income above $100,000 and a portfolio of more than $500,000.

About 98% own common stock, 90% have money in stock mutual funds and more than 60% use the Internet as their primary investment research tool.

Mr. Chanecka, a graduate of the Wharton School at the University of Pennsylvania, worked as a financial editor and columnist through much of his career as a journalist in the 1970s and ’80s.

The next forums, scheduled for Feb. 22 in Boston and Feb. 24 in New York, will focus on technology — the latter having a concentration on the Internet.