Social Media Investor Relations

The world of social media is growing at a rapid pace.  If you are a publicly traded company and are not taking advantage of social media in one way or another that you are doing something wrong.

“In 2016, 78 percent of U.S. Americans had a social media profile, representing a five percent growth compared to the previous year. According to estimates, the number of worldwide social media users reached 1.96 billion and is expected to grow to some 2.5 billion by 2018.”[1]

This trend is only growing world-wide.  So why are investor road shows and face-to-face micro cap conferences still the way micro cap companies and penny stocks look for funding?

“Back in the early 2000s, the Internet changed the way we communicate with investors. Early on, the IR section of a company’s website was a “nice to have,” not a “need to have.” Only forward-thinking companies incorporated IR sections into their corporate websites. Now, not only is it expected that a company have a dedicated investor relations page, but the SEC has outlined guidelines for how a company can use its corporate website for purposes of satisfying RegFD.”[2]

In short, many public companies are just catching wind of how powerful social media really is.  In fact it wasn’t until most penny stocks and micro cap public companies (including small cap companies) realized that social media and online investor relations saved the company thousands of dollar by complying with Regulation FD of the S.E.C. that companies really started to invest in online investor relations efforts.

“Most corporate investor relations practitioners polled in the National Investor Relations 2016 Social Media for Investor Relations Survey, 72 percent to be exact, said they don’t use social media for their work. The figure dropped two percentage points from 2013. In addition, the minority of IR pros who use social media don’t track metrics. IR pros said investors are not interested in receiving information through social media.”[3]

There are 7+ billion people in the world and only about half have access to the internet.[4]  A trends and expert say that will continue to grow until everyone in the world has access to the internet.  Granted some investor relations programs only target a small pool of accredited investors but it is highly unlikely that they are maximizing their exposure when not utilizing today’s technology to speak and communicate with other’s: social media.  Speaking personally to industry investor relations professionals I have heard that they can not measure the efficacy of social media investor relations.  Research from Greenwich Associates shines some light on why companies that are public should partake in social media and inline investor relations;

In a report released today entitled, Institutional Investing in the Digital Age: How Social Media Informs and Shapes the Investing Process, Greenwich Associates presents the results of its study of 256 corporate and public pension funds, insurance companies, endowments, and foundations in the U.S., Europe and Asia.

About half these institutions say information obtained on social media has prompted them to take some specific action. For example:

48% of the investors said information from social media prompted them to do additional research on an industry issue or topic

37% said they shared information from social media with decision-makers at their companies

34% said information learned on social media influenced a decision to work with a particular client or company

33% said information obtained on social media triggered a discussion with their investment consultant

“These results show that social media is influencing decisions that can result in the allocations of billions of investment dollars around the world,” says Dan Connell, Head of  Market Structure and Technology at Greenwich Associates and author of the study. “With approximately 40% of the institutions globally expecting to increase their use of social media in the coming year, we’re projecting a further, rapid increase of social media influence in institutional investment markets.”[5]

The report goes on to say that LinkedIn was the top utilized platform for professional investor relations to use in regards to social media.

In the article “4 Reasons to Exploit Social Media for Investor Relations” TalkWalker, a social media analytics firm suggest that social media should be used as an introduction to your company and that “listening” is probably the best things you can use social media within investor relations (an obvious bias exist). [6]

In a report via equities.com a position was taken that social media investor relations professionals see social media as having “… little overall value to their communication efforts.”[7]

We disagree.

Social media is growing at an exponential rate and public companies, hedge funds and investor relations would be prudent to pay attention to it’s benefits.  Not only can you target potential investors but it allows you to listen to the public’s opinion on certain trends, like investing trends.  It also allows you to interact directly with potential investors, professionals and even target potential company recruits.  This is all in addition to building name recognition and branding your company in front of billions.

If you are looking to exploit social media for investor relations purposes, we can help.  Contact us today.

social-media-investor-relations

 

[1] https://www.statista.com/statistics/273476/percentage-of-us-population-with-a-social-network-profile/

[2] http://www.kcsa.com/kcsa_news_092412.php

[3] http://www.cyberalert.com/blog/the-surprising-value-of-social-media-for-investor-relations/

[4] https://en.wikipedia.org/wiki/Global_Internet_usage

[5] https://www.greenwich.com/press-release/social-media-influencing-investment-decisions-global-institutions

[6] https://www.talkwalker.com/how-tos/4-reasons-to-exploit-social-media-for-investor-relations

[7] https://www.equities.com/news/what-s-the-role-of-social-media-in-investor-relations

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