VideoThe Web site was then retooled to bring this message to a wider audience. The new site has been so successful that traffic has increased 234 percent.
Other efforts included changing the earnings release to show results in each product group, preparing "Plain English" annual reports, discontinuing the practice of prereleasing estimated revenues, and starting a direct stock purchase plan so individuals can buy ADC stock at low commissions.
What worked best, though, says Switz, was "going out and pressing the flesh." During 1998, Switz and Borman presented at more than 20 conferences. In fact, in 1998, Switz averaged two days a week with current and potential investors. "Over the long haul, it is my job to cultivate interest in and demand for ADC shares," he says.
Net Impact
Switz says he started seeing results in August 1998. "When the stock moved back into the $30 range, I began to feel that investors were buying into what we were saying"--helped by a solid second-quarter performance.
There were other telltale signs. "We had an awful lot of new investors pick up ADC," he says. East Coast ownership increased from 31 percent to 45 percent between the end of 1997 and August 1998. Sell-side coverage increased from 6 analysts in 1994 to the current 23, who maintain a consensus buy rating (see chart, above). And inclusion in the S&P 500, he says, was a testament to ADC's "consistency." After all, he adds, "we are working on meeting or beating analysts' expectations in 35 of 36 quarters."
ADC stock took another hit in the October 1998 fallout of tech stocks, dropping to $18 per share. But by this past September, it was trading around $40 a share, down from an all- time high of $52.25 on April 9. Switz is philosophical about the whole experience. In the end, he says, "there is no substitute for honesty, candor, and consistency," especially in a crisis. In retrospect, Switz, who describes himself as "a high-metabolism person," doesn't believe he could have done anything different or better. Whether the analysts will ever forget that there was such a surprise, however, is another story. "Forgive is probably a better word," he says.
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