DENVER--(BUSINESS WIRE)--ModernIR, the leader in providing equity market-structure insight and analytics to public companies, announced today the firm has launched Gamma, the first statistical measure of investor relations performance. A data indicator, Gamma will offer public companies a consistent and statistically rigorous way to measure the impact of investor relations and management credibility.
Gamma can correlate a company’s daily market midpoint price over time to a proprietary ModernIR measure called Rational Price™ that tracks when active investors focused on fundamentals set price by buying shares. Gamma is provided in 12-month and 50-day views and delivered via ModernIR’s Market Structure Reports, daily, weekly or bi-weekly, depending on preference.
“We live in the era of Big Data,” said Karen Quast, chief operating officer for ModernIR. “Today’s public companies can apply data and statistical measures to the IR job to set realistic internal expectations and to bring consistency and sophistication to the practice of investor relations. Gamma rewards good IR and helps companies measure effort and outreach wisely.”
High correlation between market price and Rational Price is an ideal measure of a well-informed and efficient market in which rational investors are routinely setting price. Correlation of 70% and higher is the target. A high Gamma score is statistical evidence that rational investors assign credibility to message, strategy and management. Low Gamma indicates a need to invigorate shareholders.
Brian Leite, ModernIR’s vice president of client service, cites a recent example where high Gamma contributed to a corporate decision to forego the annual Analyst Day, saving tens of thousands of dollars.
“There was no change in the trajectory of the stock,” said Leite. “The point isn’t to reduce investor communication but to use time and resources well. Superb Gamma means the IRO is successfully helping management stay focused on the business.”
About ModernIR
Founded in 2005, ModernIR is the only financial technology firm modeling broker trade-executions for public companies with proprietary software and algorithms, translating trading data into measurements of the price-setting behavior of money. ModernIR serves the IR profession and public companies seeking better understanding of contemporary equity markets. Denver-based ModernIR pioneered Market Structure Analytics™ and serves a client-base in excess of $1.3 trillion in market capitalization. For more information, visit www.modernir.com.