With Reuters, StockTwits now rivals PR wires for reach

Tim,

I thought you were smarter than that. I have never promoted a stock ever. Frankly, the fact that people pay you money to identify penny stock promoters’ stocks to short is alarming because obviously you know nothing.

LOL read any of my 5000+ blog posts and u can see the kind of research i do…when i see your disclaimer and your inability to tell us your compensation as SEC barred convicts even do, I smell a rat…it’s not emotion, it’s called experience…PennyStockChaser’s bank account was frozen and the husband and wife team are operating overseas and even they disclosed their compensation…my subscribers could care less about a wannabe promoter like you, I’ll track your articles just to help you become honest eventually…every promoter should be given a chance, even stubborn ones like you :)

Hi Maria,

Thanks for the thoughtful comment. I understand where you’re coming from but there are a few incorrect assumptions in your understanding.

1.) There is little independent and verifiable evidence that investors read news releases on finance portals. In fact, when companies include publicly trackable links in their releases, few or none of the clicks occur on sites like Yahoo! Finance or the PR wires’ websites. The vast majority comes from company originated email blasts, followed by Twitter clients, Facebook, Twitter etc. You can proxy this yourself by looking at the social sharing on company news releases.

StockTwits.com, while having a smaller audience (addressed below) actually is up there with Twitter and is better than the finance portals in click traffic. The fact is, the audience for company originated information outside of company channels is much smaller than most assume. This is logical as those interested in a company are likely to seek information directly from the company.

In other words, there is a viable alternative to PR wires. It’s the company website, which already is the de facto recognized channel for companies in almost all cases.

2.) You cannot measure StockTwits traffic based on visits to StockTwits.com. As you know, StockTwits, like Twitter, can be accessed via the Twitter website and a variety of clients, including StockTwits Desktop, Seesmic Desktop, the iPhone app, the Nasdaq.com app. Additionally, messages from StockTwits are widely disseminated on the web, as the story outlines.

That said, StockTwits has a smaller audience than Twitter and other sites. But the efficacy is higher and, again, don’t assume that the audience for financial disclosures about particular companies is large. It’s not. That’s actually a much bigger issue, the lack of interest in the stock market amongst the general population.

Kris,

The interactive nature is indeed most valuable, especially when you have some way to verify identity or authority of participants, which in many cases you do in social media. It’s not perfect but it’s better than the chat forums of old.

I’ve been surprised by how long it has taken for these technologies to be adopted in the securities and corporate disclosure markets. I guess it’s the one area where information doesn’t really want to be free and people want to guard their privileged access to it, either for reasons of profit or control.

Gabe Riviera, founder of the popular Techmeme website, was once asked why there isn’t a Stockmeme. His answer was something along the lines of “because investors don’t like to share.” He had a point, and I wonder if that’s still true today.

Actually I did disclose that I had consulted to StockTwits when I first agreed to help them with their IR plans. This was in May 2010 and for several subsequent articles that mentioned StockTwits, I included disclosure. See here: http://irwebreport.com/20100819/hp-cme-group-ford-adopt-stocktwits-as-an-official-ir-channel/

However, after agreeing to help StockTwits and disclosing that I was advising them, it transpired that I was doing much less for them than I originally expected I would. After several months it seemed to me that what I was doing for StockTwits wasn’t materially different than the pro bono work I routinely do, except that unlike others they were serious about getting into the IR market and were willing to pay.  More important from my point of view, they weren’t benefiting from my advice because companies were not signing up in any material numbers to use StockTwits. At this point, I decided that I probably wasn’t going to bill StockTwits for the advice I had provided.

 The result was that I was now disclosing a relationship no different than any of the other informal relationships I have with all other vendors, from Thomson Reuters to Precision IR to Shareholder.com to anyone who reads my posts. I was disclosing a relationship for which I had not received payment and probably wasn’t going to because I didn’t want to since I didn’t see them benefiting from it. At this point, I decided that it was stupid to have disclosure when no money was going to change hands. 

Fast forward to earlier this month. StockTwits has agreed to now pay me $4,500 for the advice I provided them over a 9-month period. I asked them to pay because 1) I need the money and 2) their product is now gaining traction and my ethical compass says it is right that they should now pay.  They have agreed and I am happy about that. They are a really upstanding and honest group of people who treat people fairly, which is more than I can say for most of the IR service providers I’ve dealt with over the years.

So that explains why I might not have added a disclosure to certain posts were I may have mentioned StockTwits.  I will add though that anyone who thinks my loyalty can be bought at any price doesn’t know me. I am biased towards innovation and best practice and dead set against mediocrity in this business, and I always will be. No one with a crap product or service can buy my approval. Ever.

Maria, No idea what happened to your comment. I don’t see anything from you other than the two comments you’ve already posted.