Second chances don't come easy in high-tech circles. Exabyte, a supplier of tape storage devices and network storage solutions, enjoyed a heyday after its first product
introduction and subsequent IPO in 1989. But as the race for newer, better technologies mounted, Exabyte was two years late in bringing its much-ballyhooed "Mammoth" tape drive to
market. This lag time allowed main competitor Quantum to move into the lead, gobbling up 80 percent market share in the space. Wall Street quickly lost faith in Exabyte's
viability, as did customers, partners and other key stakeholders.
When Exabyte's PR/IR agency, Metzger Associates, was tapped to launch the company's "next generation" Mammoth-2 (M2) technology in late 1999, the situation was do-or-die.
Exabyte had to convince Wall Street that its management team could turn the company around from a business standpoint - and bring the stock price up from an all-time low of
$3.375.
In late January 2000, Exabyte CEO Bill Marriner and CFO Steve Smith embarked on an eight-day road show, during which they hosted 44 meetings and interfaced with more than 60
financial news organizations, Wall Street analysts and institutional investors. Trade press coverage garnered during the product launch three months earlier helped rebuild
Exabyte's credibility with skeptical investors.
During the road show, Exabyte's stock price climbed from $7 3/4 to $10 per share, hitting a 52-week high. Institutional investors such as Pacific Income Advisors and the
Kaufman Fund subsequently placed significant orders and Exabyte saw its trading volume skyrocket, with more than one million shares traded in a single day - something it hadn't
experienced since 1998. In an interview with CBS' "MarketWatch," Marriner was deemed "The Comeback Kid."
In the months that followed, financial analysts' coverage of Exabyte escalated, with experts at Branch Cabell and Van Kasper setting price targets of $21 and $23, respectively.
Analysts at Prudential Securities wrote an industry paper titled, "A Review of the Competitive Dynamics in the Tape Drive Industry" with information partially derived from
Exabyte's roadshow presentation.
(John Metzger, Kathryn Branan-Marshall, Metzger Associates, 303/786-7456)
Client: Exabyte, Boulder, Colorado
Agency: Metzger Associates, Boulder, Colorado
Campaign timeframe (IR portion): January 2000 - May 2000
Campaign budget: $65,000 ($5000/month in agency fees plus $40,000 out-of-pocket
for the road show)