Thursday, May 1, 2014

Investor Relations Departments are Engaging Investors in MANY New Ways

Without a standard model for how to engage investors online public companies and their IR departments have been experimenting. 

They’ve determined that traditional IR strategies must evolve to more effectively reach the ever-increasing numbers of investors researching stocks online.

What new strategies are IR departments employing to better engage investors?

Let’s start with earnings season.

To better tailor their earnings related messages public companies are stepping up efforts to gauge investor sentiment in advance of quarterly results.

For example, Microvision (ticker: MVIS) has in past years used their corporate blog to solicit investor questions for their upcoming earnings calls. 

Small-cap GigaMedia (ticker: GIGM) solicits earnings call questions in two press releases -- one announcing their earnings date and another their actual results.

Recent IPO Twitter (ticker: TWTR) solicits investor questions on its own platform in advance of earning by encouraging the use of hashtag #TWTRearnings. They promote this effort both through press release and their @TwitterIR account.

Finally, real estate site Zillow (ticker: Z) refers to solicited questions as “social questions” and requests they be submitted on both Twitter (#ZEarnings) and Facebook. 

Soliciting investor questions in advance of earnings helps IR departments better understand investor sentiment and what issues need to be addressed on upcoming calls.

Listening to investors pre-earnings allows for better engagement on and offline once earnings are released and conference calls take place.

Let’s next look at new IR strategies to better engage investors in real-time specifically during earnings calls.

Once earnings results are released, IR departments are increasingly experimenting with ways to increase real-time earnings call participation.

FedEx (ticker: FDX), for example uses the beginning of earnings calls to announce plans to answer real-time questions from members of online investor community StockTwits. 

Twitter (ticker: TWTR) solicits both pre-call and real-time earnings call questions from those using hashtag #TWTRearnings on their Twitter platform. It’s important to point out that they don’t appear to isolate their responses to sell-side analysts and institutional investors. They’re simply looking for the best available questions.

But arguably the most significant new IR strategy with the goal of increasing real-time earnings call engagement comes from Netflix (ticker: NFLX).

The streaming service has turned the traditional earnings call on its head by eschewing prepared remarks and going straight to Q&A. They refer to it as a “live video interview” and host it on YouTube.

The Netflix Q&A is also typically moderated.

A couple of weeks ago those moderators consisted of two well-known sell-side analysts

Current and potential Netflix investors are encouraged to submit questions to those moderators via email both before and during the call.

The result?

Arguably the most substantive, transparent, inclusive and engaging earnings call found anywhere.

IR Departments are also using new engagement strategies to disseminate key messages from earnings calls.

In order to better communicate key earnings call messages public companies are employing a variety of innovative strategies.

Many companies live Tweet their earnings calls on Twitter and StockTwits.

This allows them to selectively drive home key points.

One company employing this strategy is LinkedIn (ticker: LNKD) using both StockTwits and Twitter.

Verizon (ticker: VZ) is another.

And, PepsiCo (ticker: PEP) not only Tweets key takeaways but also pays Twitter to promote them.

IR Departments are also testing new earnings call platforms to be more inclusive, transparent and engaging.

As the WSJ recently pointed out public companies with their own social platforms are using them to showcase their own tools during earnings.

Yahoo! (ticker: YHOO) hosts its earnings calls via live stream video.

Google does the same on YouTube.

IR Departments are also experimenting with post-call initiatives to engage investors.

Zillow (ticker: Z) is leading the way.

In recent quarters, Zillow’s CEO has conducted post-earnings call interviews with TheStreet, Motley Fool and StockTwits’ investor communities.

IR Magazine had more to say on this here – as did Zillow IRO RJ Jones at a recent NIRI Boston event moderated by Dennis Walsh.

Finally, over the last couple of years the CFO of Ford has taken the time to respond to questions posed by members of the StockTwits investor community after each quarterly earnings call.


I’m sure there are many other examples of IR departments employing new strategies to engage investors.

But the picture is clear.

Individual IR departments are driving change. They recognize that traditional IR strategies need to evolve in order to better engage the millions of investors online.

In 2014 expect the list of examples to grow exponentially.

Related Posts HERE.

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