Repositioning and Rebranding a Moribund Underperformer into a Wall Street Darling

SITUATION:

Founded in 1986 as a publisher of a directory of fax machine phone numbers for businesses operating in Copenhagen, Denmark, Telepartner A/S had an interesting, though not inspiring, business history.

With the deregulation of the telecommunications industry in Denmark and in other Scandinavian countries in the late 1980s and early 1990s, Telepartner expanded its offerings into other telecommunications and communications services, as well as into neighboring Norway and Sweden.

CHALLENGES:

By the time David Politis’ agency, Politis Communications, had been hired as Telepartner’s public relations and investor relations agency in early 1999, the company had completed a small but successful public offering on NASDAQ, with its American Depositary Shares trading under the symbols of TPARY and TPARW. Unfortunately, Telepartner’s visibility within the United States in both the financial marketplace and in the media was virtually nil, with shares trading near an all-time low (between $2.25 and $2.50 per share) and with volume averaging less than 30,000 shares traded per day.

After carefully reviewing Telepartner’s business model and service offerings, David recommended Telepartner pull away from its historic base as a telecommunications company and instead reposition and rebrand itself around its expanding capabilities in the Internet space in a newly defined category:

Internet Solutions Integrator.

This strategy was recommended for two main reasons:

• Beyond phone directory services, Telepartner had begun providing a variety of Internet-related services to clients in Scandanavia, including
  • domain name registration,
  • Web site design and hosting,
  • Internet access, and
  • e-commerce services, and
• The marketplace was affording higher valuations to Internet-based firms than it was to telecommunications companies.

SOLUTIONS — A TIMELINE OF SUCCESS:

March 1999

The Politis-led team created and distributed new public relations and investor materials that repositioned Telepartner as an Internet Solutions Integrator. They also identified and began cultivating relationships with appropriate trade and financial media that would be interested in the new Telepartner Story.

May 1999

David and Politis Communications helped rename the company, positioning the company away from its telecommunications-centric name to a name (and stock symbol) more indicative of its Internet and European focus: euro909.com (NASDAQ: ENON). Interest in the now renamed euro909.com developed almost immediately, and the company saw incremental increases in both daily share volume and in its share price.

October 1999

By October 1999, the newly named euro909.com had seen its share price and volume double. Then the Politis Team landed its first independent recommendation for the stock with a target price of $12.00 per share. Other editors and stock analysts also began to recognize euro909.com as a mostly undiscovered and an undervalued company, and the company’s share price and daily trading volume rocketed in the fourth quarter of 1999 and early 2000.

January 2000

euro909.com’s stock price broke through the $30 price barrier in mid-January and the number of shares traded per day twice exceeded 5 million shares, a dramatic increase from the average 30,000-share days before David and his colleagues at Politis Communications were engaged as euro909.com’s public relations and investor relations agency.

During 2000, euro909.com became a National Market company listed on NASDAQ and it successfully completed a warrant call that generated net proceeds of $8.5 million. As of the end of 2000, the company had expanded from operations in Denmark, Norway and Sweeden to operations in six additional western European countries (with plans to continue to expand throughout Europe).

RESULTS SUMMARY:

In less than two years, the Politis-led Team

• Repositioned Telepartner in the Internet services arena and away from the telecommunications field,
• Rebranded the company as euro909.com,
• Changed the stock symbol to ENON,
• Generated the company’s first ever financial analyst coverage (with initial stock price targets of $15.00 and $35.00 per share, respectively),
• Supported the stock price rise to more than $30.00 per share (up from less than $3.00 per share) in less than 10 months,
• Helped the company qualify for a successful warrant call that netted $8.5 million,
• Supported the company’s move to the NASDAQ National Market from NASDAQ’s Small Cap listing, and
• Helped produce the company’s first annual report as the repositioned and rebranded euro909.com.