There are more than 5,000 publicly traded companies on the NYSE and the NASDAQ and more being added with each IPO. Everyone of these companies is required to report to the SEC and to tell its story to the investing public. Skilled financial communicators are in high demand. The key question? How does a company make money?

1. Buy on Rumor; Sell on News
Kevin M. Brett
February 3, 2014

2. Do You Want Fries With That?

3. Not So Fast…
• 74 percent of CEOs want graduates with a
liberal arts education
• Who can effectively communicate through
persuasive writing and presentations
• And Solve Problems
Source: Association of American Colleges and Universities Survey of 320 CEOs

4. America’s New Investor Class
• 54 percent of Americans own stocks, mutual funds and
bonds; 73 percent college graduates; 83 percent post
grads
• Internet Trading Tools; IRAs, 401Ks
• Longer life spans; higher health care costs; college
tuition

5. 24-Hour Global Markets
•
•
•
•
•
•
NYSE-NASDAQ; US
FTSE (“Footsie”) UK
DAX (Germany)
CAC-40 (France)
Nikkei (Japan)
Hang Seng (Hong Kong)

6. 24-Hour Financial News
• Wall Street Journal, Financial Times, Investor’s Business
Daily
• Fortune, Forbes, Business Week, Barron's
• CNBC, Fox Business, Bloomberg TV
• The “Money Honey” and “Mad Money”
• AP, Dow Jones, Reuters, Bloomberg, TheStreet.com
• Bloggers, Social Media and Chat rooms
• PR Newswire, Business Wire, Internet Wire

7. Introducing the NYSE
•
•
•
•
•
•
•
NYSE – Founded 1817
“The Big Board”
$16.6 trillion Market Cap
2,308 listings
Venerable Companies
Ringing the Bell
Pounding the Gavel

8. Introducing the NASDAQ
• Founded in 1971
• “Electronic Exchange”
• $4.45 trillion market cap
• 2,709 listings
• National Association of Securities Dealers
Automated Quotations (NASDAQ)

9. SEC Disclosure Rules
• Annual Report to Shareholders (10-K)
• Quarterly Earnings Reports (10-Q)
• Major Unplanned Announcements (8-K)
– Upside / Downside Guidance Variations
– Mergers and Acquisitions
– Restructurings
• Annual Meeting of Shareholders
• Prospectus for Planned IPO (S-1)

10. Watching the Ticker
NYSE
NASDAQ
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
MAT
DIS
LNKD
TWTR
NKE
YUM
HOG
BUD
LUV
MCD
MSFT
AAPL
INTC
CSCO
SBUX
SCHW
GOOG
FB
AMZN
NFLX

11. Quick Market Definitions
• GAAP: Generally Accepted Accounting
Principles
• EPS: Earnings Per Share
• IPO: Initial Public Offering
• Market Capitalization: Share price x
Number of Shares Outstanding = Value
• SEC: Securities Exchange Commission

12. Preferences and Choices
• Non-Profit Communications: $62,275
,
• Corporate Public Relations: $88,823

13. Preferences and Choices II
• Community Relations: $63,437
• Financial Communications: $117,233

14. Pay Rates for IR/PR Directors
• Investor Relations Director Range
$97,753 to $201,565
• Corporate Public Relations Director Range
$86,469 to $167,836
2013 Source: Salary.com

15. Asking the Obvious Question
“…Sometimes the most obvious question
really is the question. In Enron’s case: How
do you make money?” – Bethany McLean,
Fortune Magazine

16. How Did ENE Make Money?

17. How Does AAPL Make Money?

18. How Does GOOG Make Money?

19. How Does AMZN Make Money?

20. How Does MSFT Make Money?

21. How Does BA Make Money?

22. How Does LUV Make Money?

23. How Does SBUX Make Money?

24. How Does MCD Make Money?

25. How Does JWN Make Money?

26. How Does LULU Make Money?

27. How Does NKE Make Money?

28. How Does UA Make Money?

29. How Does TWTR Make Money?

30. How Does LNKD Make Money?

31. How Does FB Make Money?

32. Tale of Two IPOs
Connections
• 200 million subscribers
• $25.7 billion Market Cap
• $972 million revenues
• $21 million profits
• Debuted at $45
• Now $215.21
Friends
• 1 billion+ subscribers
• $158.9 billion Market Cap
• $5.0 billion revenues
• $32 million profits
• Debuted at $38
• Now $62.57

33. Q1 Financial Statement
Wildcat.com (?: CWU)
•
•
•
•
•
•
•
•
Revenues: $2 million
COGS: $1 million
Gross Margin: $1 million
SG&A: $250,000
R&D: $250,000
Operating Margin: $500,000
Taxes: $200,000
Net Income (Loss): $300,000

34. Q1 Financial Statement
Wildcat.com (NYSE: CWU)
•
•
•
•
•
•
•
•
Revenues: $2 million
COGS: $1 million
Gross Margin: $1 million
SG&A: $250,000
R&D: $250,000
Operating Margin: $500,000
Taxes: $200,000
Net Income (Loss): $300,000

35. Q1 Financial Statement
Wildcat.com (NYSE: CWU)
•
•
•
•
•
•
•
•
Revenues: $2 million
COGS: $1 million
Gross Margin: $1 million
SG&A: $250,000
R&D: $250,000
Operating Margin: $500,000
Taxes: $200,000
Net Income (Loss): $300,000

36. Q2 2014 Financial Statement
Microsoft (NASDAQ: MSFT)
•
•
•
•
•
•
•
•
Revenues: $24.51 billion
COGS: $8.28 billion
Gross Margin: $16.23 billion
SG&A: $5.51 billion
R&D: $2.74 billion
Operating Margin: $7.96 billion
Taxes: $1.32 billion
Net Income (Loss): $6.55 billion