For some time, there’s been a recurring meme suggesting that investor relations pros are to blame for their industry’s painfully slow embrace of social media. The meme goes that social media has transformed many businesses -- but because IR pros have been so concerned about the potential dangers they’ve chosen to sit on the sidelines.
So often lately, public companies have been under attack. Most of these attacks have been directed at Chinese companies publicly-traded on US stock exchanges.
During the Q&A portion of last week's Business Wire event, famed investor Warren Buffett discussed his investor relations strategy as CEO of publicly-traded Berkshire Hathaway (BRK-A). While much of his strategy is well known, he did recommend a novel approach that would complement traditional IR communications efforts. Here are some key quotes from the event:
Netflix CEO Reed Hastings is a remarkable entrepreneur. He founded a DVD-by-mail business in the late ‘90s that now boasts 25+ million subs and is disrupting the media and entertainment industries.
But similarly impressive and yet possibly overlooked is how he’s provided a blueprint for the future of online finance, investor relations, and social media. It’s not farfetched to conclude that Hastings’ latest actions will be the catalyst for a new way in which public companies court investors online.
As earnings season comes to a close, public companies continue to demonstrate an increasing focus on using their earnings calls to be more social, interactive, and transparent. The following are some recent examples:
The good news is that increased social engagement between IR and investors can occur without a third-party social media site. In fact, by using their own corporate sites as social platforms IR has both the means and tools to engage investors and thereby “move things forward”. Here’s how:
The online social media revolution of the last 5+ years has touched nearly every facet of society with one glaring exception: Open and direct online conversation between public company executives and equity investors remains minimal.
But as 2010 comes to a close, change is afoot. Public company executives are taking aggressive steps to improve and increase their online and offline investor engagement. They’re choosing novel ways of expanding the reach of their message, especially online.
These moves suggest that social media could finally play the transformative role public companies and investor relations reps have been anticipating for some time and thereby usher in a new age of transparency. This should be welcome news for investors.
As earnings season comes to a close it’s become increasingly apparent that public companies are focusing more heavily on their investor relations (“IR”) efforts. What explains this phenomenon? With so much volatility in the stock market, fear of another crash, and so-called “experts” proclaiming the death of “buy and hold”, management teams are experiencing a more challenging environment in which to appeal to the much coveted long-term oriented institutional investor. But while public companies’ more aggressive IR efforts are understandable the strategy being employed is somewhat surprising.
It's now mid-2010. And still, investor relations (“IR”) professionals are largely avoiding use of social media. Yet, the topic of social media has not only dominated IR discussion for what seems like an eternity but it’s also widely considered -- especially among IR pros -- an essential online tool for investor communications. Is there a good explanation for this -- so much talk and so much praise, but so little action?
To be fair, many IR pros are using investor websites like StockTwits and SeekingAlpha (both of which I’ve written about here and here, respectively) to monitor what’s being said about their companies online. Both sites are useful for monitoring purposes as they enjoy large readerships of active and opinionated sophisticated investors.
But, monitoring is simply employing one use of social media, “passive use”. By monitoring you’re essentially a spectator -- watching without getting involved. That’s where the bulk of public companies currently reside.
As for “active participation” in social media there’s only a small minority of public companies to be found. These companies are using a variety of platforms to push press and financial news releases and, periodically, to interact. Examples can be found on Twitter (example) and Facebook (example).
The most widely held explanation for the lack of “active participation” in social media is that public companies are concerned about violating RegFD (fair disclosure). But while RegFD may be a consideration, it’s hardly the only explanation.
If public companies were really enamored with the current scope of social media opportunities and wanted to protect themselves from potential RegFD violations they would simply apply the same policies they do to every other public appearance by management. Similar risks are present when holding earnings calls (especially now that transcripts are freely available all over the Internet), making investor conference presentations, and conducting one-on-one investor meetings. In fact, if companies were actually able to identify appealing social platforms on which to interact they could simply apply the same policies they already have in place for other public communications.
For at their core, Twitter and Facebook are news and social networks, not dedicated investor communities. And since most public companies (especially small-caps) devote limited resources to IR activities, they must be incredibly efficient. They don’t have the time to correct every article or respond to every rumor posted on every social network on the Internet. That strategy is simply unsustainable.
Instead, if public companies were able to identify a dedicated investor platform (or two) that offered the tools they needed to expand the reach of their message, they would have the perfect complement to their existing IR efforts. Most importantly, they would have a social extension to their corporate IR sites which would help increase their chances of reaching new investors -- an especially critical and challenging task at this point in time when sell-side research is on the decline and more public companies are competing to be noticed.
Conclusion
There will come a time when high-level, real-time conversations between public companies and sophisticated investors are commonplace online. We’ve already witnessed a glimpse of the remarkable possibilities. Of course, the real question now is where those conversations will take place.
Google’s (GOOG) ($GOOG) recent announcement (and Expedia's similar announcement) suggests that large cap companies are looking to increase their IR news distribution and social presence on their own corporate IR websites rather than letting those activities take place elsewhere. And, for large caps like Google, there’s no reason to think they won’t succeed.
But, many companies, especially small-caps, are not as fortunate as Google. They don’t enjoy a consistent stream of online traffic to their corporate websites. For them, a social investor platform as an extension of their own corporate IR sites is critical to reaching new investors.
So, don’t fault public companies for taking their time getting acquainted with social media. The fact is that the right combination of investor platform and tools that would allow companies to take full advantage of the opportunities social media has to offer doesn't currently exist. But when the two ultimately materialize in tandem IR outreach will be transformed, substantive, high-level online discussion will then take place, and those IR firms I regularly communicate with will finally have the social media platform they crave.
With all the new opportunities they have to engage investors on various social media platforms (discussed here and here), public companies remain somewhat focused on driving traffic back to their own corporate websites.
Last week, online travel site Expedia (Ticker: EXPE) stepped up its efforts in this area by putting out an earnings release on Yahoo! Finance entitled “Expedia, Inc. Earnings Press Release Available on Company's IR Site”.
On Expedia's subsequent earnings call, SVP of Investor Relations, Stu Hass explained:
“You may also have noticed we have changed the way we are distributing our earnings release. Rather than put the release out over the newswire, we are pointing people to our IR site where they can pull down the PDF version. You should expect us to continue this practice going forward.”
Aside from the use of PDF, this move makes sense, and benefits Expedia in two ways. It brings investors to Expedia’s corporate site where a variety of shareholder resources are easily accessible and also provides the company with an audience it can potentially monetize.
Along with this move by Expedia, I see a number of other opportunities public companies have to drive traffic to their own corporate websites:
Provide your Corporate URL during Earnings Calls
While reading a substantial number of earnings call transcripts this quarter, I was surprised to find that many IROs fail to effectively identify their corporate URLs during their calls. This is somewhat puzzling considering that earnings calls are one of the few opportunities IROs have to publicly engage investors on a wide scale. Earnings calls provide a platform to promote the investor section of your corporate website, investor update email subscriptions, and any other investor related opportunities.
What I did see were many instances where corporate websites were referred to without their URLs being explicitly stated, instead using language such as “our investor relations website”, “our website” etc. In fact, some IROs didn’t even mention the existence of a website at all.
If you want investors to find you, always mention your corporate website URL (preferably a direct link to your investors page) during earnings calls --- even if it’s obvious. --- and, especially, if a transcript is being published on SeekingAlpha.com, the financial blog aggregator. It can only increase the number of visitors to your site.
Create a Dedicated Investor Website URL
While simply mentioning your corporate URL on your earnings calls is a no-brainer, some companies take it a step further. Consider the folks at Hospira (Ticker: HSP). They have a clear investor relations URL that doesn’t require you to click on multiple tabs and/or access multiple pull-down menus on their corporate website in order to find what you’re looking for. Rather than the typical variations i.e. ir.hospira.com, hospira.com/investors, investor.hospira.com etc., it’s simply, HospiraInvestor.com. Easy. And they make a point of consistently mentioning the URL on their quarterly earnings calls. Smart.
Each quarter, SeekingAlpha publishes thousands of transcripts of public company earnings calls. At times (see above), IROs introduce these calls by providing investors a place to find more extensive earnings related information –- their corporate website. However, rarely are these web addresses hyperlinked in the SeekingAlpha transcripts. This presents opportunity.
Whether or not you wish to have your earnings call transcripts in the public domain, the fact is they’re there and accessible. And, because SeekingAlpha has a substantial readership of both institutional and high net worth retail investors, it would make sense to leverage your transcripts by having them drive traffic back to your corporate site. SeekingAlpha should be able to help by hyperlinking any mention of your corporate website in your earnings call transcripts as they do periodically with other transcripts and thus drive traffic back to your site.
Give Out Your Contact Information
With the rise of social media, consumer expectations have increased dramatically. People expect companies to respond to their needs, and respond quickly. They also expect to interface with real people, not those hiding behind generic email addresses or Twitter accounts.
The same applies for investors. Of the many transcripts I reviewed this quarter, Tier Tech (Ticker: TIER) is the only company that seems to understand these concepts. At the beginning of their most recent call, the Tier Tech CFO said the following:
“We invite shareholders and analysts who wish to speak to management about the company and its performance to schedule a meeting by contacting our CFO, Ron Johnston, at 571-382-1333 or rjohnston@tier.com.”
Maybe this CFO is incredibly forthcoming because he represents a small-cap public company challenged by the lack of investor interest. Or, maybe he really understands the current environment where accessibility and transparency are key. He might also recognize that both institutional and high-net worth retail investors are increasingly reading financial blogs to research stocks on sites like SeekingAlpha and just might call him because they read his transcript, had some questions, and found him approachable because he made his contact info available. Not a likely scenario if he’d simply offered a generic email address like IR@tier.com!
Virtual Investor Relations Programs
Finally, I came across this seemingly novel IR program mentioned by CFO Mike Burns of Volterra Semiconductor's (Ticker: VLTR) during his company’s Q4 2009 earnings call:
"In addition to be the evidence we’ll continue our bimonthly virtual visit programs. We hold virtual visit 101 session investors who are either new to Volterra or who have not had contact with us in the past 12 to 18 months and we hold a virtual visit 201 sessions for investors that are more familiar with Volterra, but want to get caught up on more current topics and industry issues. Please contact Heidi Flannery, Investor Relations, at 510-743-1718, if you would like to participate in any of these events."
Thanks to SeekingAlpha's transcript service, Volterra was able to promote this online investor opportunity free of charge on a site frequented by substantial numbers of institutional and high net worth retail investors. Not bad!
Conclusion
In this age of social media, public companies have many valuable opportunities to engage investors on platforms all over the Internet (see my thoughts on using StockTwits and SeekingAlpha via the links below). And, for those still focused on making their corporate websites the central focus of their investor relations efforts, these very same social media platforms can be leveraged to your benefit too.
(Disclosure: I’m one of the core group who built SeekingAlpha.com. I launched the China Stock Blog in 2004 (now Seeking Alpha China Stocks) and subsequently worked on product development. I’m no longer affiliated with the company. All opinions are my own.)
There’s much talk in investor relations (“IR”) circles about the challenges of social media. But, as discussed in my recent post (Investor Relations 2.0 – Is Seeking Alpha the Answer?), and, as you’ll see below, the opportunities for public companies to engage investors online using social media are real, measurable, and shouldn’t raise any red flags with the SEC.
One of the latest and more popular real-time investor platforms is StockTwits.com (“ST”); think Twitter for investors. On ST, investors share investment ideas 140 characters at a time. The company has cleverly trained stock tweeting investors to include a “$” sign next to every ticker symbol (or public company) they write about. That allows the ST team to seamlessly organize all market related tweets in one place.
At first glance, ST seems like the “Wild West” with ideas coming from all directions. Some of the banter is similar to what one might find on a typical Yahoo! stock message board. But, in fact, ST is a remarkably useful platform for identifying successful short-term traders willing to share ideas either for free or through monthly subscription newsletters.
ST is also a surprisingly useful platform for investor relations officers (“IROs”) and public companies looking to engage investors.
As the ST team freely admits, their community is dominated by short-term oriented, retail investors. These investors focus largely on technical analysis and less on fundamentals in making investment decisions. These are not the types of investors public companies typically pursue. Most public companies prefer investors willing to purchase substantial positions and hold them for long periods of time in the hopes of limiting volatility and attracting other long-term oriented institutional investors.
That said, consider the plight of micro-cap and small-cap public companies. For them, attracting institutional ownership can be a challenge. Institutional investors typically won’t touch smaller public companies until they reach certain milestones such as share price, market cap and/or exchange. By default, these companies rely on retail investors to get them to the point of institutional consideration.
That’s where ST comes in.
ST is dominated by retail investors. Some of them enjoy substantial followings. A growing number are using ST’s various platforms (ST community blogs, StockTwitsTV, and Twitter/ST accounts) to share their ideas – not all of which are based on technical analysis. Like any investor, these traders are always looking for new ideas. IROs and IR firms might find it useful to contact some of these folks and present their stories. Assuming there’s an understanding that their message will be shared using at least one of ST’s various platforms, public companies can benefit.
Investor relations officers should also be interested in StockTwitsTV.
StockTwitsTV (“STTV”) is ST’s version of a business and market focused television channel. It’s an online, interactive medium where ST community members talk stocks, take questions, educate, and pontificate. Of particular note, STTV enjoys great stock charting technology that allows hosts to effectively illustrate their technical ideas. CEO Lindzon has blogged that 2010 will bring a more regular lineup of STTV shows covering a wide variety of market related topics.
Once the STTV team solves their technical issues, they will have all the tools to become a valuable asset to investor relations. STTV can be a platform for public companies to present their stories just as they would at investor conferences. They can read the same scripts and present the same PowerPoint slides they would at conferences and thereby increase the reach of their presentations.
If they so choose, public companies can also take questions from ST community members similar to what IR vet and Sharon Merrill Associates President Maureen Wolff-Reid articulated recently on her firm's blog:
“Some IROs believe that participating in investor conferences where management delivers a standard 20-minute IR pitch is not the most effective use of their time, especially since most companies post their investor presentations on their IR websites. A better alternative is to attend conferences with a “fireside chat” format. Fireside chats are often more valuable for both management and investors because they facilitate an interactive dialogue."
With fewer opportunities to engage the investing public while still abiding by RegFD, this seems like a logical, new platform for public companies to leverage. Putting out a press release announcing an STTV appearance, reading an introductory disclaimer, and being careful about not disseminating any non-public information are obvious requirements. With many traders, money managers active in the ST community looking for new ideas, this seems like a no-brainer especially for micro-cap and small-cap public companies looking to appeal to the retail segment.
Questions for Earnings Calls
As discussed in my previous post on investor relations 2.0, public companies (especially micro-cap and small-cap) have suffered due to the decline of sell-side analyst coverage. Fewer sell-side analysts has led to fewer participants on public company earnings calls. As the Q&A portion of earnings calls is one of the few chances public companies have to speak candidly about their businesses, the lack of analyst participation has been and will continue to be a sizeable missed opportunity. Without analyst questions, there’s little chance for management teams to elaborate, go off-script, and/or provide greater color on their operational activities.
ST’s real-time platform offers IROs and public company executives a solution -- the opportunity to engage investors by taking their questions directly during the Q&A. If your earnings call has limited participation and you have a story to tell you might consider addressing questions through ST’s real-time platform.
Recently, Microvision (ticker: MVIS) used its blog to solicit questions for an upcoming earnings call (Note: They also used their Twitter account.). While the Microvision example took place during the week-long period prior to the company’s earnings call, the ST real-time platform could offer more relevant last-minute questions from those who’ve had a chance to review the actual earnings announcement.
For those concerned about violating RegFD, see the following from Microvision’s communications director in the comments section of the aforementioned blog post:
“Hi Madfgurtbn, we used all the questions provided above as the foundation for addressing the content in the conference call. If we missed something specific that you wanted addressed, let me know. However, please note, we can not answer any questions regarding sales forecasts, quantities of shipments, financial disclosures, or partnership details that are not already public through a broad distribution of a press release.”
Monitoring Investor Sentiment
Some IR firms have told me that they look to ST solely as a means of measuring investor sentiment. IRWebReport’s Dominic Jones made a compelling case for this late last year.
StockTwits Investor Conferences
ST is clearly a great platform for empowering the retail investor. I wouldn’t be surprised to see an ST-run retail investor conference for micro-cap and small-cap companies in the near future. Just as ST has been organizing offline meetups they can also leverage their community to organize investor conferences. Public companies with limited institutional ownership would undoubtedly benefit from this exposure.
As is SeekingAlpha (discussed here), StockTwits is well-positioned to respond to the social media needs of public companies. The ST platform is especially relevant for micro-cap and small-cap public entities looking to reach throngs of retail investors.
I can be reached at ezra dot marbach at gmail dot com
(Disclosure: I’m one of the core group who built SeekingAlpha.com. I launched the China Stock Blog in 2004 (now Seeking Alpha China Stocks) and subsequently worked on product development. I’m no longer affiliated with the company. All opinions are my own.)
SeekingAlpha.com (“SA”), the financial blog aggregator, recently launched its latest effort to target investor relations (“IR”) firms, their public company clients, and investor relations officers.
According to its November 9thpress release, SA launched a:
“social/business media pilot program exclusively geared towards the needs of companies and IROs. The new platform will clearly identify (and certify) a user as the IR representative of a company on the site, therefore allowing direct communication with investors.
By offering a set of tailored social media tools to IR professionals, Seeking Alpha is reducing the pain points of general social media tools by cutting out the static of general platforms and focusing exclusively on the business/investment community. Through tools such as StockTalks (a Twitter-like feature), Instablogs and Followers/Following, Seeking Alpha gives companies the chance to build and communicate directly with a loyal and valuable following.”
The message is clear:
(1) If you’re employed in IR, make SA your social media home.
(2) Forget Twitter. Use SA's real-time investor platform along with other serious investors.
SA’s renewed effort to become the social media home for IR would seem to make sense. A recent survey suggests that public companies are increasingly using Twitter for IR purposes. And, assuming these survey results represent a trend, this demonstrates a stark departure from IR’s history of doing little online outside of their own corporate websites. SA might be aware of this or is simply hoping to become the real-time investor platform of choice before Twitter (or StockTwits for that matter) gains too much traction in IR/investor circles.
From an IR perspective (assuming you have the resources), I’d suggest experimenting using all of these platforms. But, in general, there are so many things SA could be doing to benefit IR with a clearer ROI, it’s difficult to get excited about this so-called “pilot program”. I’m guessing that IR feels the same way since these SA tools have been available for quite some time, and few, if any, IR professionals seem to be participating.
What else is SA currently doing for IR?
Well, SA’s CEO has been courting IR for years (since my departure) as you can see here (sub req) and here (sub req). My guess is he started talking to the IR Web Report (a must-read for anyone in IR) after the editor penned a series on how useful StockTwits and StockTwits Desktop can be for IR professionals.
In his post on using SA for IR purposes, IR Web Report’s Dominic Jones recommends the following:
(a) Advertising;
(b) Contributor outreach;
(c) Becoming a registered user (profile, follow list, comments, instablogs, stocktalks).
While I wouldn’t recommend advertising (ROI unclear), Dominic’s suggestions for identifying bloggers who could potentially write about your company is a great idea and a no-brainer.
Similarly, I’ve always recommended that IR encourage their institutional investors to contribute articles to SA. Institutional holders know your story, they’ve done extensive research, they can articulate your stock moving catalysts, and, if they’re still standing post-credit crisis they might engender some respect from fellow SA readers. I have enough anecdotal evidence to suggest that contributions from institutional holders can lead to attracting new leads and in some instances new investors.
And, now, for some more ideas about what SA can be doing for IR:
1. Question & Answer Sessions – General Company Discussion
Based on the number of questions received from the SA community (90+), the Q&A with Wave Systems (WAVX) CEO Steve Sprague was the most successful. The SA audience was engaged for three consecutive days peppering the CEO with questions about his business. David Collins of IR firm Jaffoni & Collins made sure that there were no violations of RegFD and we made ourselves available to remove any inappropriate comments (of which there were none). The high quality of questions posed was a testament to the SA community. IR Web Report called the Q&A session: "the future of IR".
After concluding the Wave Systems (WAVX) Q&A, I received an email from one of the company’s institutional holders employed by a prominent investment bank boasting about the results and boldly suggesting that this was the future of conference calls, especially for small-cap public companies. I continue to agree with his assessment.
For a variety of reasons the SA Q&As eventually lost steam --- but NOT because public companies weren’t interested. There’s no reason this service can’t be re-launched, assuming, of course, you have the proper partner at SA.
For those concerned about RegFD, issuing a press release announcing the Q&A, including a legal disclaimer, and acting as careful as you always are about not disseminating non-pubic information should be sufficient. But, checking with your legal counsel is an obvious move to cover your bases.
2. Question & Answer Sessions – Specific Issue Discussion
Question and answer sessions can also be useful for companies looking to address a specific issue. Shortly before I left SA, I was in discussions with an IR professional who wanted us to host a Q&A so his CEO could address negative rumors impacting his stock. Rather than hosting a conference call, he and I figured that exposing his CEO to the SA audience in an open (but controlled) environment of sophisticated investors would be a more effective and transparent course of action.
Q&As addressing specific issues should be especially appealing in the near future as shareholder activism increases (as is expected partly due to certain upcoming rule changes). While Target (TGT) was able to fend off Pershing Square’s Bill Ackman, by leveraging the consistent flow of shareholder traffic to its corporate web site, other companies aren’t so fortunate. Companies with limited site traffic will be forced to use other platforms to fight shareholder activists.
(While heavyweight Bill Ackman may be a far-fetched example for most companies, consider Ironfire Capital’s Eric Jackson who took on Yahoo! (YHOO) management despite owning fewer than 100 shares of stock. This could happen to you.)
Again, this is another case where SA can play a role in supporting IR by providing a platform to respond to shareholders.
3. Questions for Earnings Conference Calls
Many micro-cap, small-cap, and mid-cap companies struggle to attract participation in the Q&A portion of their earnings calls. This has become an ever-increasing challenge due to the decline in sell-side coverage. With few, if any, sell-side analysts participating on calls and most institutional investors avoiding them altogether so as not tip their hand, IR can be tempted to take live questions from investors who haven’t been screened properly. This can lead to a variety of problems as I’m sure many of you have already experienced.
Some companies are attacking this issue of limited earnings call Q&A participation by reaching out to investors online. According to the WSJ, “in March, digital display maker Microvision began using its corporate blog to solicit questions from retail investors for its quarterly call, in effect opening the call up to any interested party with a computer. Matt Nichols, the director of communications for Microvision, says that shareholders that frequented the company’s investor-relations blog had asked for a way to participate in calls”.
While Microvision was fortunate to enjoy an active investor base eager to participate, many companies aren’t so lucky. Many don’t have corporate blogs or they have blogs that don’t attract much traffic.
That’s where SA comes in. It should be easy enough for SA to appeal to its investor audience for questions prior to a company’s earnings call. SA has already demonstrated the ability to generate tons of high quality questions for Q&As. Questions for earnings calls should be no different. And, because SA is organized into individual sector sites, IR has the ability to target investors already interested either in their respective companies or companies in their space.
Taking this one step further, SA can also help public companies by soliciting questions for annual meetings. According to the WSJ, “In May, Intel Corp. became the first major company to allow shareholders on the Web to vote and submit questions as if they were on the floor of the annual meeting. Moreover, a handful of small companies, including furniture seller Herman Miller Inc. have saved money by switching to virtual shareholder meetings instead of renting halls…”.
4. Investor Conferences
As sell-side analyst coverage declines, investor conferences should become (assuming they aren’t prohibitively expensive) a more important outlet for public companies (especially micro-cap and small-cap) to tell their stories. The reasons to attend are obvious. But what most companies miss is the larger opportunity to capitalize on their appearances once their conferences have concluded.
While at SA, I introduced the investor conference transcript service. Having SA transcribe and publish a transcript of your company’s conference presentation drastically increases the number of investors exposed to your company’s story. And, thanks to Zack Miller (formerly in charge of business development), those transcripts not only show up on SA but also on Yahoo! Finance. The beauty of conference presentations is that companies tell their stories in a short, concise, and substantive fashion due to the limited time they’re allotted.
For investors looking for new ideas, this is exactly what they’re looking for. Investors are not likely to listen to a webcast of your conference presentation. They’re also not likely to really understand your business from reading one of your earnings call transcripts. But, they just might read a short transcript of your conference presentation if you make it freely available and accessible. And, who knows? If they’re reading SA they might also be a blogger (or, in fact, an SA contributor) looking for new ideas for companies to write about. And, soon enough, you might have bloggers writing about your company because you’ve given them a critical tool to do so --- your story in brief.
While at SA I partnered with a number of the afore mentioned IR firms and others including Zack Noory (Nexus Investor Relations) to have their conference transcripts show up on SA (and, of course, Yahoo! Finance). I also partnered with The Wall Street Analyst Forum to do the same for its public company attendees. Even if transcripts are delayed for a couple of days so as not to threaten the “sanctity” of the conference, public companies should expect this transcript service as required in this age of social media. With webcasting a traditional part of the conference package, so should online transcripts be too.
While I’m aware of many in IR still interested in this service, it no longer appears to be available through SA. With transcript providers on call (to transcribe earnings calls), SA should have no problem rolling this out once again.
“It is challenging for micro-cap companies to identify potential investors willing to take the time to meet with management and consider making an investment.”
This is yet another opportunity for SA to support IR. As mentioned previously, SA has a substantial readership of sophisticated investors, sector specific websites allowing companies to target investors interested in their space (if not their company), and, of course, geographic reach throughout the US and abroad. Thus, companies could promote upcoming investor meetings on SA and then carry out due diligence on those interested parties in order to determine those suitable to meet with.
While SMA's Walsh specifically cites “micro-cap companies” as being challenged in this area, no doubt many small-cap and mid-cap companies suffer from the same issue as well.
With a basic service SA should be able to help alleviate this problem.
Conclusion
While IR would love to use their corporate websites to fulfill all shareholder needs, the fact is that many sophisticated investors are found elsewhere. As a result, IR must explore new platforms to expand the reach of their message, build trust, address issues, fight activist campaigns, etc. Furthermore, the forward thinking IR professionals I mentioned above have already paved the way with remarkable results (without violating RegFD).
“Despite the challenges, Barbara Doyle, VP of IR for Lawson Software, recognizes the necessity of using social media. ‘As a $1 bn small-cap company, we need to consider every ... viable channel to get our message out. As a technology company, ... it’s a part of our culture. And our customers, employees and investors are increasingly using these channels to get information, so it’s simply not a choice, not an option,’ to ignore social media.”
Soon enough, an investment site will step up and respond to the needs of IR. SA is doing some things to address this issue. But, as I’ve presented here, there are many more interesting things they can be doing with a clearer return of investment. While I believe that SA is best positioned to address the many IR needs, there’s no reason why another company in its space can’t step up and do so themselves.
I can be reached at ezra dot marbach at gmail dot com
Former investment banker, product development @ SeekingAlpha.com. Currently investing and advising in the finance 2.0 space.
TWITTER: @ezramarbach
EMAIL: ezra(dot)marbach@gmail(dot)com
CONTRIBUTOR: http://irwebreport.com/author/ezra_marbach/
