StockTwits on Yahoo! Finance: Implications for companies

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INVESTOR relations professionals who have dismissed social media as a fad or irrelevant are in for a rude awakening today as messages from StockTwits, the Twitter equivalent for traders and investors, are now appearing on their Yahoo! Finance ticker pages.

Yahoo! Finance is the 800lb Gorilla of finance and investing websites and is as popular with industry professionals as it is with retail investors. According to Hitwise, Yahoo! Finance commands a 33% market share in the investment website sector, far ahead of second-placed MSN Money with 7.6%.

“This partnership creates an incredible opportunity for our community members to share their ideas and build a bigger audience for themselves.  There will be thousands of new voices contributing and sharing ideas and it will be fun watching the growth of our community accelerate further,” said StockTwits CEO Howard Lindzon in a blog post.

The new StockTwits stream appears on all US company ticker pages under Market Pulse in the left menu.

A new influence on stock sentiment

With Yahoo! Finance adding StockTwits, a trader or investor on StockTwits who has something to say about a company can share it with just about the entire market. As Mashable correctly points out, the StockTwits API is already being used by Bloomberg, CNN Money and MarketWatch.

Yahoo! Finance is by far the biggest investment site

And those messages are distributed in real time, which will drive people to monitor the StockTwits stream on companies’ Yahoo! Finance ticker pages when news is breaking about a company, such as during earnings announcements.

As I’ve reported before, earnings and other releases distributed via PR wire services are slow in filtering out to the web, typically involving an 80-second delay. However, traders with real-time access to PR wire feeds or Bloomberg or Reuters terminals often share results on StockTwits long before the news hits the web via the PR wire feeds.

That speed and access to breaking information will drive people to monitor StockTwits during company news events, and give StockTwits users greater influence on sentiment.

Another impact is that services like StockTwits shine a spotlight on the current uneven access in the capital markets. When retail investors discover that professionals on StockTwits are getting company news releases a minute or more earlier than they are, the unevenness of company disclosure practices will be brought into sharp relief for millions.

That could create a whole new set of issues for regulators and the IR community, which largely plays the role of gatekeeper between management and The Street, using access as a way to curry favor with influencers. StockTwits democratizes access to information and levels the playing field like never before. Companies that ignore it will be snubbing a huge chunk of the market.

Some companies participating already

Of course, some companies like HP, eBay and Dell have begun using StockTwits as part of their IR outreach activities by signing up for the StockTwits IR product, which gives them a stronger voice in the StockTwits stream.

Now, company messages sent via StockTwits IR accounts will appear on the Market Pulse pages of their Yahoo! Finance ticker pages. Companies participating on StockTwits will also be able to respond to questions from StockTwits users, as Dell did recently in this tweet.

All of this means that IR departments must become more tech savvy and responsive if they want to have a voice in the thriving online trading and investing community that has developed on StockTwits and other websites.

Companies like HP are participating on StockTwits.

As prominent StockTwits user Joshua Brown, a New York City-based investment advisor, put it: “Millions of monthly Yahoo Finance users now have the chance to experience the camaraderie and intelligence-sharing that many thought had died with the physical exchanges and trading floors of a bygone era.  That sense of community is alive and well, now conveniently plugged in on Yahoo with every ticker symbol.”

At this time, StockTwits only provides coverage of NYSE and NASDAQ stocks. Foreign companies listed on these markets are included, such as Petrobras or Baidu Inc.

For messages to appear on Yahoo! Finance, they have to be sent using the StockTwits platform and cannot be sent via Twitter.

(Disclosure: I have in the past advised StockTwits on its IR services, but do not have a current consulting arrangement with the company.)

Dominic Jones

Dominic (bio & disclosures) is IR Web Report‘s founder and an online investor relations consultant. He advises leading public companies and investor relations service providers worldwide on using the web for disclosure, engagement and profile building. You can contact him via the contacts page.