Friday, October 27, 2006

A Facebook for Small Fry

Companies with securities listed on the Over-the-Counter Bulletin Board have something that national exchange listed securities do not - their own social utility - a “Facebook” for small fry.

OTC Village is a self-described electronic investor relations and communications portal for OTC/BB companies. Interested companies can sign up for membership and use the OTC Village web site as a platform to communicate with current and prospective investors. The founders, Jeff Corbin and Todd Fromer, certainly know the investor relations field. They run KCSA, a worldwide investor relations firm based in New York.

It does not take the intellect of a rocket scientist to realize that one of the primary impediments to cogent communications with shareholders for an OTC/BB company is budgetary. OTC/BB companies rarely can justify the expenditure for the usual full-court press offered by investor relations consultants. National exchanges often provide considerable assistance in helping listed companies with programs to “meet and greet” investors, but OTC/BB companies get very little outside assistance.

OTC Village is intended to fill the void at an affordable price. The web site offers a tutorial on how to use the portal as well as investor relations tips and best practices guidelines. It is possible for the company to link directly to the OTC Village from the corporate web site.

Of course, the social networking sites for people like MySpace and Facebook have worked because they have visitor traffic. OTC Village has set up a page for visitors called
My OTC Village. Interested parties can look up information about companies, sign up for e-mail alerts and chat with other investors on message boards. The verdict is still out on whether OTC Village will be able to screen out chat room visits by those who use misinformation to influence trading. We note that My OTC Village requires a registration questionnaire, but it asks very little information.

OTC Village has just swung its digital doors open to the world so I imagine there are a few kinks to work out in the program. I wish them luck. See the posts "Cloaking Device" and "What Goes Up, Must Come Down" for my perspective on the value of solid investor communications policies. OTC Village could be a step in the right direction for small companies.

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