You Can Boost Your Company’s Stock Price With This Single Action

New CEO—you can boost your company’s stock price with this single action.

I know, it sounds like clickbait, but let’s look at the research and take stock of an important lesson.

Based on a 2015 study of 900 publicly traded companies, researchers at the University of Oxford Saïd Business School found that new CEOs can positively move markets, quite often delivering a sustained stock price increase. How?

While newly appointed “outsider” CEOs see bigger gains, fortunately almost all new CEOs will see some gain from delivering a strategy story to the investment community within their first 100 days. The average gain in stock price? 5.3%.

There are two important findings in the research:

1. The investor community dislikes the uncertainty associated with a new CEO, so presenting a new strategy creates confidence.
2. If the new CEO waits for longer than 100 days, there is no impact on stock price.

The researchers also noted that only 40% of new CEOs present their strategy in the first 200 days of their tenure. So most new CEOs miss this opportunity.

It should also be noted that new CEOs can sometimes drive down the stock price when they announce a new strategy shortly after their appointment. It doesn’t happen often; Jack Dorsey at Twitter is an example of this phenomenon.

The lesson here? If you are a new CEO or CEO-designate, you should be planning to do some investor and analyst calls to present the new/updated strategy within that precious 100-day window.