Winner: CCG Investor Relations and Red Lion
Campaign: Red Lion Roars Again - Restoring Luster to the Red Lion Brand
The Mission:
After numerous owner changes, Red Lion wanted to position itself as a more up-scale hotel, competitive with brands such as Marriott, Hilton, Four Points by Sheraton and Crowne
Plaza.
The Challenge:
Red Lion had a low trading volume on Wall Street and consequently had problems attracting institutional investors and retail brokers.
The Strategy:
In 2005, CCG Investor Relations President Crocker Coulson and his team entered the picture and worked with Red Lion to design and execute an investor relations program.
Components included new investor materials, an investor Web site, an annual report and other collateral that underscored Red Lion's new business focus and revitalized brand.
The Execution:
CCG developed a peer group of lodging companies that compete with Red Lion to support its claim that Red Lion's shares were undervalued and that its growth prospects were
superior to many of its peers. They then identified approximately 125 research analysts who cover the resort industry in the U.S, as well as funds that have an affinity for the
hotel business. Based on this information, the team arranged a series of investor road shows to introduce Red Lion's new business strategy to fund managers and analysts.
Mission Accomplished:
- Red Lion's stock price increased 160% since the start of the Investor Relations campaign;
- Average monthly trading volume increased from 5,000 shares per day to a three-month average of 71,000 per day as of April 2007;
- Five of the targeted analysts (JMP Securities, Thomas Weisel, Robert W. Baird and Company and Friedman, Billings, Ramsey) commenced coverage in 2005;
- Numerous small-cap funds established stock positions in Red Lion and institutional ownership increased from 24 to 63 as of April 2007; and
- Red Lion generated $64.3 million in gross proceeds via a common stock offering of 5.8 million shares. PRN