PERHAPS I’m old-fashioned, but when a company uses a service like Twitter to tell followers about company earnings, I expect them to make a reasonable effort to post the news simultaneously to other channels.
There’s no point in tweeting investor news if the people getting it are the last to know. For investors, timing is money. But even if I have no intention of trading a stock, I still want to get important disclosures at the same time as everyone else.
It’s simple courtesy. Inviting investors to follow you on Twitter and then being late with your tweets is a poke in the eye to loyal supporters. It shows a lack of commitment to keeping investors informed.
Tardy tweets also undermine a company’s credibility. After all, it doesn’t take much expertise to coordinate the simultaneous release of information via Twitter and other channels. If a company cannot coordinate a 140-character tweet, how can one be confident about their disclosure controls?
One day, many examples
But let’s look at some examples of what I’m talking about. All of these examples are from companies that reported earnings results yesterday:
- A gold company listed both in the US and Canada issued a results release at 8:00am ET but only tweeted the news at 6:45pm ET –- a delay of 10 hours and 45 minutes.
- A uniform company released earnings via a PR wire at 4:15pm ET and tweeted the same information 77 minutes later at 5:32pm ET.
- A technology company issued its release at 4:15pm ET and only tweeted it at 4:43pm ET, a 28-minute period during which more than 150,000 shares were traded.
- A health care solutions company released earnings at 4:00pm ET but didn’t mention the results on Twitter until announcing at 4:35pm ET that its conference call had started. Eventually, the results release showed up, but almost 8 hours after the fact at 11:53pm ET.
- A networking company released earnings via a PR wire at 4:05pm ET but tweeted it only at 4:31pm ET – a 26-minute delay during which more than 100,000 shares changed hands.
- A hard disk drive maker that released its results at 4:01pm ET but tweeted them only 24 minutes later at 4:25pm ET – a delay which saw more than 200,000 shares traded.
In fact, none of the companies that tweeted about their earnings yesterday did so anywhere close to the actual release time.
Worse than the above examples are those companies with Twitter accounts that didn’t bother to tweet their earnings results at all.
Take, for example, a big Internet company that chose instead to use its “official Twitter account” to tweet about apparently more important things, like “Devo sees influences in modern groups like the Ting Tings and LCD Soundsystem.”
The fact that this was top of mind for them while their stock was tanking on huge volumes makes them look completely out of touch with their shareholders.
IR professionals cannot afford to be complacent
This laxness shouldn’t be tolerated by competent investor relations departments. Even if IR professionals aren’t directly responsible for their company’s Twitter activities, it is still their role to counsel their company’s staff about the importance of timeliness when handing financial disclosures.
IR professionals who want to be taken seriously by management, regulators and investors cannot afford to turn a blind eye to this and other kinds of social media sloppiness.
While many in the IR profession are dismissive of social media and even the web in general, the fact is they must get out in front of these issues to spare their companies considerable pain down the road.
There’s a pressing need for companies to integrate social media into their formal disclosure processes so that when the inevitable slip-up occurs, the company can show regulators and critics that it was at least trying to do things properly.
- Learn more about integrating social media into your company’s IR dissemination practices in IR Web Report’s New Online Disclosure guidelines.