Social Media and Investor Relations
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Social Media and Investor Relations

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A short presentation on how investor relations professionals can start using social media to save time and clarify their company messaging

A short presentation on how investor relations professionals can start using social media to save time and clarify their company messaging

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  • Interesting to note all the recent SEC discussions about changing the language level of company filings. They are realizing that the average consumer is unable to decipher typical legalese. I predict this will lead to even more pressure by the SEC for companies to start blogging, as a way to clarify their messages giving all audiences the ability to understand company news at the same time.
  • In short? Social media is exactly the same thing you have been doing for years, just now online. There is nothing new to clarifying messages but instead of doing it on the phone or in meetings, you are making it public for everyone to read at the same time.
  • Don’t jump into social media blindly. There are great consultants that can help you create a program and sell it internally to your management team. If you need support for SM, talk to your PR team. At the forefront of customer communications, PR teams are being pushed into social media at an unprecedented rate.
  • Middleberg Commmunication’s recent survey shows that 70% of journalists are using social networks to assist in reporting, up 41% from last year. The survey also found that 69 percent of respondents go to company websites to assist in their reporting, while 66 percent use blogs, 51 percent use Wikipedia (wow), 48 percent go to online videos (double wow), and 47 percent use Twitter and other microblogging services (would have guessed higher on this one). And who uses what the journalists write? Analysts.
  • As you can see, almost a third of the analysts surveyed by Brunswick are reading blogs and message boards on a regular basis.
  • Seeking Alpha 4M unique users/month - 25% are institutional investors Stock Twits has around 85,000 users and adding 500 a day. Linked to whale wisdom (example of how much data is available online) – stocktwits now available through bloomberg as well. Wikinvest – part of a new wave of contributor driven communities. New data platform is very impressive
  • Despite slow adoption rates of social media by analysts, almost all agree that new media will be increasingly important in business decisions
  • ebay writes out all of their earning call tweets in advance and all is approved by legal before being “tweeted”. In addition, ebay tweets disclosure statements before the call.
  • Everyone learns in one of three ways: Reading, doing or seeing/hearing. By providing your message in various formats, you can ensure greater understanding of your company and product.
  • A great example of how Dell uses their department heads to discuss programs, products and corporate decisions. This insight allows analysts a better understanding of the company.
  • At a minimum, you should be monitoring the social media discussions about your company online. Here are several free sites that you can search to see what the real world is saying about your company and products.
  • Replying to rumors has always been a no-no for IROs. I am not suggesting that you reply to every single rumor on the market, but if you see a message you can clear up, or a rumor with the potential to affect your stock, consider writing a clarification message. For example: If the rumor is that your company is buying another, perhaps do a blog post on your company’s M&A policy. Of course, if your news or response will affect stock, be sure to disclosure it with a release or 8-K.
  • Starting a program is easy. But start slow! Listen first. Find out what people are talking about and where. What questions are you seeing pop up regularly? Blog about them or add them into your site FAQs. One of the primary jobs of the IRO is to clarify the message to the financial community. If the same questions are coming up regularly then this has not been done.
  • Everyone makes mistakes. Everyone gets attacked publicly. Before reacting, do a simple online assessment. Is the rumor on a site well trafficked by your analysts? Then make it a high priority. Is it on a small site, not relevant to your decision makers? Consider not responding (but continue to monitor it, just in case)….

Social Media and Investor Relations Social Media and Investor Relations Presentation Transcript

  • Social Media & Investor Relations NIRI: Boston Serena Ehrlich [email_address] @serena
  • Defining RegFD
    • Designed to prevent public companies from disclosing material information that may affect the price of one’s stock on a selective basis.
    • RegFD can be met by a press release, or more recently via company’s website
    • Note: To date, no public company has been investigated by the SEC for their involvement with traditional social media websites although several companies have modified their conduct.
  • What Social Media Is
      • Analyst interaction on steroids
      • A natural extension of many of your current in-house depts
      • 24/7: Social media is continuous
      • Prevalent
        • Lower barriers of entry for companies
        • Higher consumer expectations
      • Successful
        • Shown to save time
        • Shown to increase company message clarification
        • Shown to increase revenues
      • Not going away
      • Encouraged by the SEC
      • Permenant
  • What Social Media Is Not
    • Replying to message boards
    • Sharing information that has not been disclosed
    • A one-way news broadcast platform
    • Non-responsive
    • Text only
    • Cheap
    • Easy
    • Static
    • Perfect
  • Journalist Use of Social Media Source: 2nd Annual Middleberg/SNCR Survey of Media in the Wired World
  • Analysts Information Sources Source: Brunswick Group
  • Who is Using Social Media: Twitter
    • 35% use Twitter for investor relations
    • 68% who use Twitter for IR are in the U.S.
    • 53% provided a link to their earnings release only
    • 48% actively engage with their followers
    Source: Q4 Web Systems
  • Investor Platforms
    • Largest financial blog aggregator partnered with Yahoo!Finance. 4M unique users.
    • Available on Bloomberg. Trading social network. Based on Twitter. 85K users, growing 500 a day.
    • Wiki finance portal. Social interactive data.
    * Source: Q4
  • Future Usage of SM by Analysts Source: Brunswick Group
  • Types of Social Media Used in IR
    • IR websites
    • Company blogs
    • 3 rd Party blogs
    • Multimedia
    • Investor platforms
    • Microblogs: Twitter
    • Company/competitor Intel
    • Interactive press releases
    • Virtual shareholder meetings
  • Company Blogs: Cisco
    • Cisco: Uses its consumer-focused blogs to stave off rumors that could affect stock prices
    • Results:
      • Time saved
      • Stable stock price
      • Increased factual information sharing
  • Microblogs: ebay
    • Tweets analyst calls and other key pieces of information
    • Results:
      • Time saved
      • Stable stock price
      • Increased factual information sharing
  • Interactive Press Releases
    • Make it easy
      • Include Links
      • Include video explanations
      • Include graphics
    • After all…. How do you learn?
      • Reading
      • Seeing
      • Doing
  • Multimedia: Dell
    • Dell: Investor relations vlog
    • Results:
      • Time saved
      • Stable stock price
      • Increased factual information sharing
  • Company/Competitor Intel
    • Google News Alerts
    • Social Mention
    • Twitter
    • Seeking Alpha
    • StockTwits
  • Why Use Social Media: Time Saving tips
    • Repetitive phone calls
      • Instead: Flush out the answers to these questions on your blog. Have legal approve these in advance to save more time
      • Time saved: 1 hour a day, 5 hours a week, 260 hrs a year.
    • Stock moves due to inaccurate information
      • 8 hours to resolve the issue, 2 hours to write press release, etc.
      • Instead: Write a short, blog post outlining your position in the industry related to the rumor
      • Time saved: 10 hours minimum + a more stable stock price
  • Starting a Social Media Program
    • Listen to your analysts – what sites are they using?
    • Measure your online footprint
    • Create a companywide social media policy
      • Ensures solid company messaging and eliminates potential mistakes
    • Write your social media messaging when you are writing your release
    • Review your website
    • Blog! Or at least update your FAQs
      • Promote blog in press releases, email signatures, analyst emails so people know to look here for recent news
  • Don’t forget RegFD
    • Company officials are more likely to make a disclosure error in person or on the phone than via social networks.
    • Social media policy is mandatory
    • Transparency is a requirement
    • Pre-written comments ensure no disclosure errors
    • Include disclosure language/links (cmply.com)
    • Moderated or no blog comments are ok!
  • Making Mistakes
    • Everyone makes mistakes
    • Guess how long it took Dell to perfect its SM program?
    • What to do if you are attacked online? Don’t react (yet)
      • Assess the situation/impact:
        • Size of site
        • Audience
        • Site visibility
        • Site tone
        • Tools: Compete.com. Alexa.com
      • Determine response
        • Update your blog with correct, previously disclosed information
        • Outreach publicly
        • Outreach privately
        • Know when to shut up
  • SEC Resources*
    •   • /rules/interp/2008/34-58288.pdf  Aug. 08 interpretive guidance on websites • /pdf/disclosuredocs.pdf  survey of individual investors on use of disclosure • /spotlight/xbrl.shtml XBRL home page (SEC webcast planned for 6/10/09) • /news/press/2009/2009-116.htm proxy access proposal • /rules/final/2007/34-56135.pd f e-proxy rules • Follow @SEC_News on Twitter
    • *Courtesy of Dick Johnson, IRCafé.com
  • Who is Startup Army
    • Startup Army is a full-service technology and marketing firm with one main goal, to help our clients build a stronger business.
    • Startup Army offers a wide range of consulting and building services including Social Media executive briefings and consulting
    • Follow me on Twitter: twitter.com/serena
    • Email me! [email_address]