SOME readers might be wondering if I’ve gone completely mad by saying this week’s three-day CEO open interview hosted by blog network Seeking Alpha represents the future of IR.
You might be wondering why I am advocating that you put your CEO in front of a group of hardened investors, analysts and finance bloggers — some operating under pseudonyms — to let them ask whatever they want about your company over the course of three days. Just like Wave Systems Corp. (WAVX) CEO Steven Sprague did this week.
I’ve already explained that I think Seeking Alpha’s open CEO interviews are the most powerful form of IR I’ve ever seen. There are many reasons I think that. Here are some of them:
- The open blog interview format is inherently credible. It’s an unpredictable forum. Management has to be prepared to cede control to the audience. There’s no telling what questions you will get. Any company willing to put itself out there like that immediately earns respect. Of course, it’s then up to the company to preserve and build upon that initial goodwill through the information and tone of its responses to the questions.
- The ability for analysts to ask questions without fear of retaliation leads to tougher, more insightful questioning. On conference calls and at investor conferences, analysts and fund managers often hold back. They also treat management with kid gloves for fear of being blackballed. Not so in an open blog forum where analysts can hide their identity. Some of the questions will make you squirm if you’re the one being quizzed, and blush if you’re in the audience. But that simply adds to the format’s credibility, and the credibility of the CEO who is being grilled, especially if they can keep their cool no matter what is thrown at them.
- The unique, highly informed demographic of Seeking Alpha’s contributors and readers leads to a high quality dialogue. These folks know their stuff and take no bull, as was evident from the caliber of the questions in the Wave interview.
- The contributors and readers trust Seeking Alpha as a facilitator. The network has built a community of contributors and facilitated their access to Yahoo! Finance. Many Seeking Alpha contributors command intense loyalty and trust from their own highly informed readers. (You just have to look at some of the contributors’ blogs to know they’re not attracting people because of their web design skills. Their readers actually read. I am a certified contributor, too. :-)) A forum with such strong credibility and buy-in isn’t easy to replicate by companies themselves, their outside advisors and service providers, or even brokerage firms.
- Questions are moderated to keep the dialogue civil but uncensored. This gives companies some assurance over the quality of the discourse. Readers and contributors are more likely to trust Seeking Alpha’s judgment in censoring questions because of the website’s blogging pedigree. Forums tied to companies or other organizations with perceived biases towards companies cannot achieve this level of trust. The Seeking Alpha staff have an investment analysis or journalism background.
- The ability to cover a broad range of topics from investors with different levels of familiarity with the company offers something for everyone. Seeking Alpha CEO David Jackson was right yesterday when he wrote that the Wave Systems interview probably provides more useful information about the company than its recent conference call or investor presentation. Over the course of the three days almost 100 entries were logged by community members and the company’s CEO. That doesn’t happen anywhere else. The record of the discussion will be invaluable material for anyone researching the company in the future.
- The CEO has time to think through his or her responses. Writing something down allows you to gather your thoughts. That leads to more complete answers. While the format also offers the opportunity for the CEO to call in the PR people and lawyers to put his words through the spin cycle, any CEO who does that is going to fail in the open interview format. People want it straight from the top, unfiltered and from his or her own hands. That doesn’t mean someone shouldn’t review the questions and give the CEO some pointers on how to avoid making selective disclosures.
I could go on, but what I think is not that important. What matters is what investors think. I went through the Wave Systems interview to see if any of the questioners directly referenced either the format of the interview or the CEO’s decision to participate.
It wasn’t hard to find references embedded within many of the questions. I’m republishing them below. As you read the quotes, remember that Seeking Alpha’s community members typically don’t bother with platitudes. The quotes are presented chronologically. Notice how the enthusiasm builds as the interview develops. That’s going to be a key way to measure how your CEO is doing in these things while they’re ongoing.
Great to have you here answering questions.
Thanks for taking questions Steven.
Thanks for doing this — it’s really helpful.
Hi Steven, thanx for taking the time to answer our questions!
Thanks for taking the time to answer all these questions.
Thanks for your answers. This has been a great forum and I appreciate your taking time to respond at length over the past few days. Great job!!
Thanks for taking the time to answer these questions in this format.
Steven again thanks for your time and answers.
Thanks for answering my questions over the last few days. I believe this forum was most educational & informative & hope you will do it again in the future as we progress.
Great three days here on seekingalpha.com Thank you!
I appreciate the fact that you have taken the time to respond to my questions.
This has been a terrific forum for questions and answers. Thank you for giving your time Steven.
Thank you for your time over the last three days.
That says it all, doesn’t it?