Lack of Meaningful Analyst Research Contributes to Slow Economic Recovery


Lack of Meaningful Analyst Research Contributes to Slow Economic Recovery

Keating Capital's Investment Adviser Releases Latest White Paper Outlining How Decline in Volume of Equity Research Has Hampered Growth for Many Companies

GREENWOOD VILLAGE, Colo.--(BUSINESS WIRE)-- Keating Investments, LLC, the investment adviser to Keating Capital, Inc. (NAS: KIPO) (, has released a new white paper titled Analyzing the Analysts:A Survey of the State of Wall Street Equity Research 10 Years after the Global Settlement. The paper, authored by Timothy J. Keating, President of Keating Investments and CEO of Keating Capital, outlines some of the changes that have occurred regarding equity research and initial public offerings over the last decade, identifies a number of policy issues that need to be addressed and proposes a series of common sense solutions.

One of the findings outlined in the paper is that as of December 31, 2012, out of 5,044 exchange-listed companies, 1,443 (representing nearly 29% of all companies listed on major exchanges) had no meaningful analyst coverage of their stocks. Further, of the 1,443 exchange-listed stocks without meaningful analyst coverage, 1,105 have market caps of less than $250 million, representing 55% of all listed companies with market caps under $250 million.

"These micro- and small-cap stocks are the farm team for tomorrow's Fortune 500 companies," said Mr. Keating. "But without meaningful equity research and the credibility and liquidity that go hand in hand with it, these companies have essentially been 'orphaned' by Wall Street. They receive none of the benefits of being public but carry all of the burdens.

"The primary reason for a firm to become public is to raise capital. When newly public companies freshly loaded with cash go out and hire employees and invest in plants and equipment, it helps grow the overall economy," Mr. Keating continued. "Without the benefit of Wall Street research, institutions and individual investors are much less likely to make a bet on the future of an unknown company, thereby creating further drag on the nation's economic recovery."

In addition to providing a comprehensive overview of the facts and circumstances leading up to the Global Settlement, the extensively researched white paper examines the changing nature of equity research and explains how premium services (e.g., investor conferences, access to management, etc.) have gradually supplanted written research as the items most highly valued by investors.

In his conclusion, Mr. Keating offers a number of simple policy recommendations which could help restore the economic incentive for Wall Street to staff up the sales, trading and research desks to cover small companies for the benefit of issuers and investors alike.

"We advocate for a program that would permanently change tick sizes for smaller stocks and allow all issuers to control the tick sizes of their own stocks. We would suggest that the program be coupled with a modest market structure reform to revitalize equity research and make coverage economically viable for Wall Street so that it can once again become available to those companies that need it most—namely the one out of every four public stocks that currently has none," Mr. Keating explained.

"Finally, the quiet period and other restrictions on the disclosure and dissemination of public company information should be rescinded to eliminate the information asymmetry that currently favors the largest institutional investors at the expense of individual and small institutional investors and which undermine the integrity of the entire IPO process. These three measures together would benefit all market participants and would likely spur market activity and give the overall economy a boost."

To download the entire Analyzing the Analysts: A Survey of the State of Wall Street Equity Research 10 Years after the Global Settlement white paper, go to

About Keating Investments, LLC and Keating Capital, Inc.

Keating Investments, LLC ( is a Greenwood Village, Colorado-based SEC registered investment adviser founded in 1997, and the investment adviser to Keating Capital, Inc. (NAS: KIPO) . Keating Capital is a publicly traded Business Development Company that specializes in making pre-IPO investments in innovative, emerging growth companies that are committed to and capable of becoming public. Keating Capital provides investors with the ability to participate in a unique fund that allows its stockholders to share in the potential value accretion that we believe typically occurs once a company transforms from private to public status.

To be added to Keating Capital's email distribution list to receive quarterly newsletters and other announcements, go to

Keating Investments, LLC
Investor Relations Contact:
Margie L. Blackwell, 720-889-0133
Investor Relations Director
Public Relations Contact:
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Chris Moon, 973-850-7304

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