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Investor Relations and Social Media: How, Why and What's Next

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Investor Relations and Social Media: How, Why and What's Next Powered By Docstoc
					   Social Media
         &
Investor Relations

                     NIRI: Boston
                            Serena Ehrlich
               serena.ehrlich@gmail.com
                                 @serena
                Defining RegFD
• Designed to prevent public companies from
  disclosing material information that may affect the
  price of one’s stock on a selective basis.
• RegFD can be met by a press release, or more
  recently via company’s website
• Note: To date, no public company has been
  investigated by the SEC for their involvement with
  traditional social media websites although several
  companies have modified their conduct.

                                                        2
            What Social Media Is
–   Analyst interaction on steroids
–   A natural extension of many of your current in-house depts
–   24/7: Social media is continuous
–   Prevalent
     • Lower barriers of entry for companies
     • Higher consumer expectations
–   Successful
     • Shown to save time
     • Shown to increase company message clarification
     • Shown to increase revenues
–   Not going away
–   Encouraged by the SEC
–   Permenant
         What Social Media Is Not
•   Replying to message boards
•   Sharing information that has not been disclosed
•   A one-way news broadcast platform
•   Non-responsive
•   Text only
•   Cheap
•   Easy
•   Static
•   Perfect
             Journalist Use of Social Media
       80%


       70%


       60%


       50%


       40%


       30%


       20%


       10%


        0%
                Journalists using social   Using Twitter or other
                                                                    Reading blogs   Viewing videos online   Listening to podcasts
                        media               microblogging sites
      Series1            70%                       48%                  66%                 48%                     25%




Source: 2nd Annual Middleberg/SNCR Survey of Media in the Wired World                                                               5
          Analysts Information Sources

Traditional business media in print             7%




               Social network sites                   13%




Blogs, message boards, chat rooms                                         30%




 Traditional business media online                                                            45%




    Real time subscription services                                                               46%



                                      0%   5%   10%   15%   20%   25%   30%     35%   40%   45%     50%

Source: Brunswick Group
                                                                                                        6
    Who is Using Social Media: Twitter
•   35% use Twitter for investor relations
•   68% who use Twitter for IR are in the U.S.
•   53% provided a link to their earnings release only
•   48% actively engage with their followers




Source: Q4 Web Systems
                                                         7
               Investor Platforms
                  • Largest financial blog aggregator partnered
                    with Yahoo!Finance. 4M unique users.

                  • Available on Bloomberg. Trading social
                    network. Based on Twitter. 85K users,
                    growing 500 a day.
                  • Wiki finance portal. Social interactive data.




* Source: Q4
    Future Usage of SM by Analysts




Source: Brunswick Group              9
    Types of Social Media Used in IR
•   IR websites
•   Company blogs
•   3rd Party blogs
•   Multimedia
•   Investor platforms
•   Microblogs: Twitter
•   Company/competitor Intel
•   Interactive press releases
•   Virtual shareholder meetings
                                       10
         Company Blogs: Cisco
• Cisco: Uses its consumer-focused blogs to
  stave off rumors that could affect stock
  prices



• Results:
  – Time saved
  – Stable stock price
  – Increased factual information sharing
                                              11
             Microblogs: ebay
• Tweets analyst calls and other key pieces of
  information




• Results:
  – Time saved
  – Stable stock price
  – Increased factual information sharing
                                                 12
       Interactive Press Releases
• Make it easy
  – Include Links
  – Include video
    explanations
  – Include graphics
• After all…. How do
  you learn?
  – Reading
  – Seeing
  – Doing                           13
             Multimedia: Dell
• Dell: Investor
  relations vlog



• Results:
  – Time saved
  – Stable stock price
  – Increased factual
    information sharing
                                14
       Company/Competitor Intel
•   Google News Alerts
•   Social Mention
•   Twitter
•   Seeking Alpha
•   StockTwits




                                  15
     Why Use Social Media: Time
            Saving tips
• Repetitive phone calls
   – Instead: Flush out the answers to these questions on your
     blog. Have legal approve these in advance to save more
     time
   – Time saved: 1 hour a day, 5 hours a week, 260 hrs a year.
• Stock moves due to inaccurate information
   – 8 hours to resolve the issue, 2 hours to write press release,
     etc.
   – Instead: Write a short, blog post outlining your position in
     the industry related to the rumor
   – Time saved: 10 hours minimum + a more stable stock price
                                                                 16
  Starting a Social Media Program
• Listen to your analysts – what sites are they using?
• Measure your online footprint
• Create a companywide social media policy
   – Ensures solid company messaging and eliminates potential
     mistakes
• Write your social media messaging when you are
  writing your release
• Review your website
• Blog! Or at least update your FAQs
   – Promote blog in press releases, email signatures, analyst
     emails so people know to look here for recent news
                                                                 17
           Don’t forget RegFD
• Company officials are more likely to make a
  disclosure error in person or on the phone
  than via social networks.
• Social media policy is mandatory
• Transparency is a requirement
• Pre-written comments ensure no disclosure
  errors
• Include disclosure language/links (cmply.com)
• Moderated or no blog comments are ok!
                                              18
                    Making Mistakes
• Everyone makes mistakes
• Guess how long it took Dell to perfect its SM program?
• What to do if you are attacked online? Don’t react (yet)
   – Assess the situation/impact:
       •   Size of site
       •   Audience
       •   Site visibility
       •   Site tone
       •   Tools: Compete.com. Alexa.com
   – Determine response
       •   Update your blog with correct, previously disclosed information
       •   Outreach publicly
       •   Outreach privately
       •   Know when to shut up
                             SEC Resources*
    • /rules/interp/2008/34-58288.pdf Aug. 08 interpretive
    guidance on websites
    • /pdf/disclosuredocs.pdf survey of individual investors on
    use of disclosure
    • /spotlight/xbrl.shtml XBRL home page (SEC webcast planned
    for 6/10/09)
    • /news/press/2009/2009-116.htm proxy access proposal
    • /rules/final/2007/34-56135.pdf e-proxy rules
    • Follow @SEC_News on Twitter
*Courtesy of Dick Johnson, IRCafé.com




                                                             20
          Who is Startup Army
• Startup Army is a full-service technology and
  marketing firm with one main goal, to help
  our clients build a stronger business.
• Startup Army offers a wide range of consulting
  and building services including Social Media
  executive briefings and consulting
• Follow me on Twitter: twitter.com/serena
• Email me! serena.ehrlich@gmail.com

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