Follow the
money trail
Corbin Butcher looks to the stock market for
clues on the likely future of tradeshows
s the most cold and
rational market on
earth, an efficient
stock market
represents the intersection of
knowable information. Now it can
give us a unique insight into what
the consensus may be on exhibitions
– as told by where new money is
being put at risk.
Global exhibitions are an
extremely fragmented US$137bn
industry (source: ufi.org), with
organiser revenue accounting for
approximately $34bn (source: AMR).
The top 10 organisers account for
~20% of the market, with Informa
PLC and Reed Exhibitions the two
market leaders with 6% and 5%,
respectively. In such a fragmented
market, these two are lead indicators
because they simultaneously shape
the global exhibition schedule and
are publicly traded.
Over the three months to 6 May,
Reed Exhibitions’ (LON:REL) share
price dropped 10%, while Informa
(LON:INF) dropped 41%. When we
normalise for revenue mix, size,
debt, and correlation to the market,
we find (unsurprisingly) Covid-19
impacted both companies relatively
equally, despite the different
price movement. But Informa is
the real story here. Despite the
dramatic price drop, investors
recently showed the market they
unequivocally believe in a bright
future for exhibitions and face-toface
marketing starting in fall 2020.
On 23 April 2020, amid
widespread Covid-19 lockdowns,
Informa received a fresh $1.25bn in
a follow-on equity offering.
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www.exhibitionworld.co.uk