Tuesday, May 7, 2013

What Did the SEC Mean? CEOs Don’t Care, Embrace Social Media More than Ever

The SEC has acted again -- and there’s much debate about what they meant.

But that hasn’t stopped public company CEOs from forging ahead using social media to court investors.

Why hasn’t the supposed lack of clarity from the SEC stopped CEOs in their tracks?

Because social media platforms are much more than simply venues to potentially disseminate material, non-public information.

In fact, CEOs and CFOs can effectively engage investors on social media platforms and impact investment decisions without revealing material, non-public information -- and thus avoid the SEC issue altogether.

Take, for example, what happened just last week. The CFO of Ford conducted a 40-minute online Q&A with the StockTwits community. The Q&A was both substantive and actionable for current and potential investors interested in Ford and the auto space. There was nothing material about the conversation -- and yet it provided information critical to anyone considering an investment in Ford.

Of course, this sort of Q&A model is nothing new. We’ve seen powerful examples of executive engagement on social platforms in the past.

But the pace of engagement appears to be increasing. We can see this clearly from the recent activities of Netflix (NFLX), Zillow (Z), Tesla (TSLA) and FedEx (FDX).

This is all great news for investors. 

It's also great news for social media sites and their revenue generation efforts.

Not only are public companies increasingly engaging investors online but they’re also showing a willingness to pay for IR services. Hundreds of companies are utilizing StockTwits’ paid IR service -- and now Pepsi, for example is using promoted Tweets on Twitter to push IR content to the masses.

But are Twitter and Facebook the best platforms for courting investors?

While public company CEOs are largely using mainstream social media platforms like Twitter and Facebook to reach investors online, they will ultimately gravitate toward social investment platforms. That’s where investors spend their time. That’s also where it’s easier to target investors based on their specific sector interests. One possibility is through sponsored content.

Whether it’s Twitter, Facebook or StockTwits, it’s clear that CEOs are embracing social media. No one seems to be waiting for clarity from the SEC. For, clearly there’s enough investor outreach opportunities to act on without it.

1 comment:

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