PERSPECTIVE AND VIEWPOINT

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Social media, more specifically social investor channels, have become an important opportunity as well as risk for companies’ investor relations efforts.  They represent an opportunity because of their popularity and reach.  They represent a risk because of the amount of both undereducated and willful misinformation being posted.  

Not only have these social investor channels become a primary source for individual investors, but institutional investors are paying a tremendous amount of attention, as well.

It’s not difficult to understand, as social media in general has taken over as one of the most important mediums of communications in the world today.

With that in mind, let me offer some quick, specific recommendations for playing better offense and defense on social investor channels.

The most important social media/social investor channels that you should be working include, in rough order of importance, Linkedin, YouTube, StockTwits, X, SeekingAlpha, Reddit, Motley Fool and Yahoo Finance.

Offense

The objectives of social media offense are to get more people to look at your stock, and to convince those people of the investment opportunity.

1. Make the company and the IRO more visible on these channels.  That means no more hiding behind IR@yourcompany.com in your documents.  Your IRO needs to be visible and invite people to talk to them.  I have introduced myself on StockTwits, X and other channels as the IRO for my company and invited people to ask questions.

2. Did you know you can have all the Linkedin pages you want?  I like to set up a Linkedin page just for IR.  I post a very brief earnings summary, direct people to our announcements and quarterly calls, and answer questions.

3. There are probably amateur analysts on YouTube who follow your industry sector.  Get to know them and offer to answer questions.  At one company, there was a guy on YouTube with his own channel to talk about companies in our group.  I appeared on his channel live the Saturday after our earnings call to answer questions from him and his 53,000 subscribers. 

4. Create and post content frequently on these channels.  For example, I did a one-slide summary of quarterly results, which I posted to X, Linkedin, StockTwits and other channels.  

5. Find issues you can use to lead discussions, building your industry credibility.  These get tremendous visibility.  Think big.  For one company example, I put together a web event about the future of the wearables industry, which our CEO emceed, but featured speakers from HIMSS (a healthcare technology IT society); the federal Office of the National Coordinator for HIT; International Data Corporation; and three universities that were doing wearables-based health research.

6. Leverage video.  Video is the new powerhouse marketing tool.  It is prioritized in internet search and has an ability to convey authenticity and power far beyond written words.  For example, it is easy to capture video of your CEO, CFO and other company leaders talking about key company and industry issues.  These are incredibly powerful and get wide pick-up.

Defense

The well-known downside of the Internet is how much inaccurate and purposefully biased or deceptive information is put out there.  The Defense objective, then, is to correct misinformation and challenge mischaracterizations.  If you aren’t already doing this actively, you’ll be horrified by how much wrong is said about your company, your management team, your strategy and your financial performance.   

1. Monitoring is step one.  Somebody needs to watch all these channels.  And some of the channels are prolific, especially StockTwits, which is one of the more popular discussion platforms.  Consumer brand stocks tend to have higher followings than industrials.  For example, Vimeo has more than 1,300 watchers on StockTwits; Jetblue has 27,000.  

2. The IRO should introduce him or herself and invite questions on these channels.  Make it personal.  Use your name and your direct phone number.  Do not hide behind the blind email addresses that many companies’ use.

3. Correct and challenge incorrect information.  Most people on these channels have either an agenda (long or short) or an axe to grind (the server at your restaurant in Peoria was rude).  You have to be careful in answering, but if your IRO sticks to “here’s what we last said about that”, you’re in safe territory.  I often like to point people to specific sections of our filed documents, such as suggesting people read our revenue recognition policy, or the liquidity and capital resources section of the 10-Q.

4. Stick to the facts and ignore the heat.  Some posters get very impassioned and can be pretty nasty about your management team.  It’s so much easier to let that go and just respond factually, instead of getting into an argument.

5. Prioritize.  You could spend your entire day on StockTwits.  But, if there are industry watchers on YouTube who have a large following, that’s your better time spent. For example, I spent as much time with the YouTube analyst who had 50,000 followers as I did with each of my regular sell-side analysts.

6. Remember that your good offense will offset a lot of the defense you might have to play.  By putting out a good volume of quality information, you’ll get investors more engaged in your agenda, not what someone outside wants to argue about your company.  I call this the “have the fight on your own turf, not theirs” strategy.