A COUPLE of weeks ago, investor relations pro Patrick Kiss wondered why IR has been slow to adopt social media and what can be done to “move things forward”.
He exhorted the IR industry, saying, “for progress to be achieved in investor relations in social media, monitoring is not enough. Engagement is necessary — and all members of the financial community should take part.”
Over the past year, I’ve written extensively about IR and why it’s been slow to adopt social media (here and on my blog). In sum, I’ve argued that had an interactive investor platform with the right tools materialized, mass adoption of social media would have already taken place. There’s little doubt that the IR industry is ready.
The good news is that increased social engagement between IR and investors can occur — without a third-party social media site. In fact, by using their own corporate sites as social platforms IR has both the means and tools to engage investors and “move things forward”.
1. Earnings Call Questions & Answers
Consider Microvision (NASDAQ:MVIS). This small-cap public company solicits investor questions on their corporate IR website prior to quarterly earnings calls. This allows them to engage investors and tailor their presentations to address areas of concern. The company then typically follows-up on its website to clarify statements made during their call. As you can see from the comments section investors are clearly participating.
A second engagement option is the IDT (NYSE:IDT) model. Each quarter’s earnings call is limited to a presentation, without Q&A. During said presentation the company solicits investor questions and responds to some portion of them on its corporate IR site following the call. This exposes their message to a broader audience than just their earnings call participants. Again, investors, specifically institutional investors, are participating.
By consistently following either the Microvision or IDT model, IR signals to investors that they’re ready and willing to engage on their corporate IR site. This not only lays the foundation for increased investor interaction there but also potentially decreases the amount of time required to respond to follow-up phone calls from shareholders. And with corporate websites recognized as fair disclosure points there should be little concern about violating RegFD.
2. Investor Conferences
IR pros looking to increase social engagement with investors online should also consider investor conferences. While deemed an essential part of most IR budgets, investor conferences typically require significant time, effort, and travel. As a result, the return for management is often debatable.
But consider what investor conferences can do for companies if subsequently extended online. At conferences, management teams spend 15-20 minutes presenting their case. They typically do so under the protection of safe harbor provisions thus allowing for greater color on current and future corporate activities. This is exactly the kind of information both retail and institutional investors are looking for but to which they don’t always have access.
IR has the means to deliver management’s conference message to investors online and thus vastly increase its reach. They can do so by posting transcripts of management’s presentations (along with their PPT presentations) on their corporate IR websites. These transcripts can conceivably lay the foundation for online investor discussion and IR engagement.
There are hordes of savvy financial bloggers searching the Internet daily looking for new stocks to cover and invest in. Many of these bloggers enjoy mass distribution of their content through high-trafficked sites like Yahoo! Finance. Giving bloggers the tools they need to write about your company can go a long way toward influencing vast numbers of investors who may not be visiting your corporate IR website.
In sum, management is already sold on attending investor conferences. It’s already part of the typical IR budget. So they may as well make their conference message that much more accessible to the fast growing online population who research stocks by posting a transcript on their IR website.
3. Question-and-Answer Sessions
Finally, and possibly most compelling relates to a new opportunity from the Motley Fool. They’ve begun hosting question-and-answer sessions for public company CEOs to engage and interact with the Motley Fool investor community. I’ve written about this at great length here.
It’s conceivable that Motley Fool could lead the way in transforming IR and in doing so becoming the social platform of choice for public companies looking to reach new investors. This is an especially great opportunity for small-cap public companies who typically struggle to attract investor attention.
IR has a choice. They can continue to utilize traditional IR practices and wait patiently for investors to recognize their stories OR they can take proactive steps (as some companies are already doing) to engage the growing numbers of investors online.
If they choose the latter, there are many compelling opportunities to build awareness, seed discussion, and participate in substantive, interactive conversations online. I’ve proposed some of these opportunities above and welcome your ideas in the comments section below.