Inderes, a newly listed small-cap company, faced significant liquidity challenges following its October 2021 IPO. The company’s initial public offering was modest at €5.7 million, with 70% of shares locked up for the first year and a highly concentrated cap table dominated by employee ownership.
Initial Challenges
The share price surged 100% on opening day — reaching €50 versus the €25 IPO price — then experienced a prolonged decline as market efficiency took hold. The challenging business environment and slowing core growth further complicated investor relations efforts. Management received pressure to resolve the liquidity issue quickly, with board members expressing concern: “This does not look good, Mikael.”
The Quick-Fix Myth
Initial suggestions to attract institutional investors proved ineffective. As Mikael discovered, institutional investors were unwilling to participate precisely because the stock lacked sufficient liquidity — creating a circular problem. This realization prompted a strategic shift toward accepting that resolving liquidity would require time and multifaceted approaches.
Key Strategic Actions Implemented
Natural Owner Diversification
The concentrated employee ownership structure naturally evolved through two mechanisms:
- Shareholders fulfilling personal financial goals (home purchases, debt repayment, sabbaticals)
- Employees departing the company and liquidating holdings
This organic diversification increased share supply without company intervention.
Analyst Coverage
Inderes secured commissioned research coverage from SEB, generating thousands of reader engagements. Third-party analysis provides markets with credible, forward-looking information, encouraging trading activity among investors.
Retail-Focused Investor Relations
Rather than pursuing institutional audiences, Inderes adopted an aggressive retail strategy:
- IPO exclusively available to retail investors with Inderes accounts (generating 10,000+ shareholders)
- Webcasting all investor events across social media channels
- Active community engagement through company forums
- Strategic participation in retail-focused events
The company’s stock discussion forum accumulated over 500,000 views, 1,800 messages, and represents massive investor engagement.
Focused Resource Allocation
Given limited IR resources, management concentrated efforts where they could achieve maximum impact rather than spreading efforts across institutional investor channels.
Results
By Q4 2024, Inderes ranked as the 8th most liquid stock on Nasdaq First North Helsinki among 48 analyzed companies. The company achieved 7.3% quarterly trading volume relative to total market capitalization — a respectable figure for a newly listed company with minimal IPO float.
For context, main list companies averaged 6% quarterly turnover in 2024, compared to 4% for First North marketplace stocks generally.
Conclusion
Addressing share liquidity for small-cap companies requires patience, strategic persistence, and recognition that quick fixes are unavailable. Success demands coordinated action across multiple dimensions: enabling natural ownership evolution, securing quality analyst coverage, and maintaining intense focus on achievable investor segments rather than pursuing unrealistic institutional capital.