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Social Media and Investor Relations

It is keenly important to combine the understanding of technology and community use of Social Media with a thorough understanding of traditional Investor Relations in order to ensure strict compliance with all regulatory requirements and maximize effectiveness of the program.

As social media continues to increase in popularity for distributing company news and marketing information, it has also naturally become a topic of increasing interest in investor relations. While many investor relations professionals are taking a wait and see approach to implementing social media tactics into their IR programs, some are strategically incorporating channels, such as corporate blogs, YouTube and Twitter as part of their communications around a company’s quarterly earnings announcement

The investor community has long exhibited similar traits to what we now call Social Media in the Web Age.

  • Community is hungry for information
  • Certain individuals are highly influential and put out advice that is eagerly consumed by many
  • Susceptible to rumor, hearsay, and innuendo that is often relayed quickly or triggers immediate action

Internet technology has increased the speed of communication and the spread of the audience. Market impact can happen very quickly as a result of what, in previous years, might have been a very small and localized action.

Investors are Using Social Media TODAY:

67% of Global Online Population use Social Media and Blogs

75% of professional investors use corporate web sites daily or weekly

47% of investors say they have read information on a blog or social network that prompted further investigation

20% admit to making an investment decision or recommendations based on social media sources

 63% of US pro investors say blogs and social networks will play an increasingly important role in investment decisions in the future

(Sources: Universal McCann Wave 3 & Nielsen Online report March 2009 ; Rivel Research ; Brunswick Research report September 2009)

What IS Social Media?  Let’s define what we are talking about.

Social Media includes:

  • Blogs and microblogs (corporate blogs,, Twitter)
  • Forums (
  • Product/service reviews (Yelp!, CitySearch, Google/Yahoo/Bing local search)
  • Social Networks and aggregators (Facebook, LinkedIn, MySpace, Youmeo, Plaxo)
  • Reference/Crowdsourcing (Wikipedia, SideWiki)
  • Video (YouTube), slide presentation (SlideShare) and photo sharing (Flickr)

Social Media Tools By Category:

  • Conversation Enabling
  • Social Networks
  • Content Sharing
  • Open Platforms


How it Impacts your Business

 How do we use Social Media for Investor Relations?

Is it effective?

Is it complicated?

Is it safe?

Social Media (conversation enabling tools, social networks, content sharing, and open platforms) can be a valuable and important tool for communicating with the investor community, boosting awareness among stakeholders and increasing value for shareholders.

Legal Concerns Should NOT Keep You from Using Social media

Rules are the same as for all communications from public companies

No material misstatements and omissions of fact in communications

  • Applies to blogs and shareholder forums, per antifraud provisions of 1934 Act, including Rule 10b-5

Liable for employee statements, even in individual capacity

Cannot require users to agree not to make investment decisions based on blog or forum

Cannot disclaim liability for damages regarding use or inability to use blog or forum

  • Applies to blogs and electronic shareholder forums (Rule 14a-17)

Other Legal Considerations:

Liable for hyperlinked third party information if involved in preparation of information or endorsed or approved information.

Regulation FD (Fair Disclosure) requires simultaneous or prompt public disclosure of material, non-public information that is selectively disclosed intentionally or unintentionally.

Information on company website is considered public if:

  • Website is a recognized channel of distribution
  • Information is disseminated so available to securities marketplace
  • Reasonable waiting period for investors and market to react

What’s involved in a Social Media Program for Investor Relations? Listen First, Speak Later.

 Monitoring the ongoing conversation is as important, or more, than posting content.

Social Media IR Activity


  • Rumors
  • Complaints, inaccurate reporting, slander
  • Competitor or industry conversation


  • Earnings reports
  • Press releases
  • Other information of value to investors

Important to Research and Observe to Determine Key Factors

  • Influence
  • Behaviors
  • Attitudes
  • Presence
  • Conversations

Set Strategy Using Defined Building Blocks

  • Listen
  • Respond
  • Engage
  • Integrate

Prepare to listen: set up monitoring

  • Choose tools and processes for monitoring
  • Define reporting parameters and processes
  • Start listening to the conversation

Plan active participation: develop “playbook”

  • Who has authority to post/respond
  • Rules and “persona” for engaging
  • Guidelines for responding and/or notification
  • Decision tree/process flow if necessary
  • Pre-scripted responses or legal copy needed for material disclosure, etc.

Think about what you want to say: develop engagement calendar

  • Map out planned posts, most obviously quarterly earnings and related support
  • Depending on channel, create or plan content in advance
    • Include new product or service announcement
    • Financial news
    • CEO blog or Twitter posts related to industry thought leadership

Start talking: launch active participation

  • Publicize channels, i.e. Twitter, YouTube, etc.
    • Emails to shareholders
    • Put link on web site home page
  • Build follower base
  • Engage in conversation, within rules/guidelines
  • Monitor, report, track metrics to determine continued value or identify success/areas of improvement

SM Tools for IROs:

  • Seeking Alpha: an aggregator of 1,200 financial blogs.
  • a Twitter-based network, which is hot among traders and now distributed by Bloomberg.
  • Wikinvest: a financial portal that aggregates data feeds and creates a ‘virtual’ report on your company.