Posts Tagged ‘Social media’

Twitter IR could be interesting

November 8, 2013

TWTR NYSEA few years ago an investor relations colleague told me Twitter was “the end of the world as we know it.” Bothered by the cacophony of 140-character mini-messages, this Old Schooler was offended by the damage that tweeting could inflict on our language. To me, it looked interesting rather than scary.

And now Twitter, Inc., after a hugely successful IPO on Thursday that raised roughly $2 billion (which The New York Times DealBook blog sniffed was “more modest” than what the company might have gotten if pricing had been higher), is going to be even more interesting for IR people to watch.

The social media platform has begun life as a public company pledging to talk to investors through – well, social media. To be sure, there is a Twitter investor relations webpage, though I found the corporate site only after some searching. The IR page itself is worth checking out, a bit unconventional with its news from the company blog of mostly non-investor related happenings, a page of financial releases (“Coming soon” … like the earnings, a cynic would say) and, of course, a feed from @twitter.

But this will be worth following. In rolling out Twitter’s stock offering, management pledged to practice its own preaching – using online postings and social media (its own) to get the word out. From the TWTR prospectus:

Channels for Disclosure of Information

Investors, the media and others should note that, following the completion of this offering, we intend to announce material information to the public through filings with the Securities and Exchange Commission, or the SEC, our corporate blog at blog.twitter.com, the investor relations page on our website, press releases, public conference calls and webcasts. We also intend to announce information regarding us and our business, operating results, financial condition and other matters through Tweets on the following Twitter accounts: @dickc, @twitter and @twitterIR.

The information that is tweeted by the foregoing Twitter accounts could be deemed to be material information. As such, we encourage investors, the media and others to follow the Twitter accounts listed above and to review the information tweeted by such accounts.

Any updates to the list of Twitter accounts through which we will announce information will be posted on the investor relations page on our website.

That all seems to be in line with the SEC’s guidance on IR use of social media and company websites for disclosure (speaking as a non-lawyer). Twitter has the advantage of starting afresh – investors aren’t accustomed to seeing its news in one particular place or format.

Twitter fin releases

The end of the world? Hardly – but IROs will be watching with interest.

© 2013 Johnson Strategic Communications Inc.

And now, Twitter as a public company

November 7, 2013

TWTR tweet

Buy side half-interested in social media

June 11, 2013

Just over half of institutional investors are using social media to gather intelligence on companies and industries as part of their research, according to a survey released Monday by NIRI and research firm Corbin Perception.

While 52% of 87 buy-side investors surveyed say they monitor social media – not much change from 56% in a 2010 survey - they are tuning into social channels more frequently. Some 39% monitor social media on a daily basis, up from 12% in 2010. Others check periodically or in response to someone calling a specific post to their attention.

The investors say overwhelmingly (92%) that information from social media isn’t entirely reliable – it’s intelligence that helps fill in the “bigger picture.” But most of those who monitor social media say their investment decisions have been influenced at some point by what they see.

The top three categories of social media watched by the buy side:

On down the line in buy-side usage are company blogs, chat boards, Motley Fool, Twitter and so on. Facebook isn’t in the top 10.

One-fourth of the buy-side people surveyed don’t use social media at all for work, and 38% can’t access social media sites on work computers because of company policies against it.

The bottom line for IR, according to NIRI and Corbin:

As social media continues to evolve, IR professionals must closely monitor company-specific social media content. That said, when it comes to getting their company story our, one-on-one meetings, the investor presentation, analyst days and conference calls remain the leading sources of reliable information, according to the buy side.

Corbin provides a copy of the survey report on its website.

So where are you in monitoring and/or engaging with social media?

© 2013 Johnson Strategic Communications Inc.

Congratulations, FB, and good luck

May 17, 2012

Facebook pulled it off.

- The New York Times “DealBook” site, May 17, 2012

A nice summary by NYT “DealBook” writers Evelyn Rusli and Peter Eavis. Facebook did pull off the IPO of the year, pricing at $38 a share for a total sale of $16 billion. The market initially valued the company at $104 billion.

Congratulations, FB!

There is a sense of relief, after the IPO with more media hype than any in recent memory, in seeing it priced and starting to trade. Following a few more days of craziness, no doubt, investors can settle down and begin looking at Facebook as they would view any other public company.

Here are a few bits of information for the curious investor relations pro:

Being public will impose a new sort of discipline on Facebook the company. Thinking about disclosure vs. trial balloons and leaks. Telling investors the basics like revenue and earnings. Meeting quarterly expectations or taking a beating. Perhaps a future day when hedge funds and analysts call for a new CEO.

I’m not going to second-guess the valuation, roughly 100 times trailing 12-month earnings. Or $115 for each of those ballyhooed 900 million users. Enough market gurus already are opining on FB, and people were willing to pay the $38.

Rather, I’m looking forward to watching the biggest social network as it grows and matures in the coming months and years. The “DealBook” writers comment:

The question is whether the company’s management will make it work.

Facebook, in many ways, is like a mining company sitting on valuable deposits that are hard to dig up and refine. At a market value of $104 billion, investors believe Facebook is sitting on gold. But the share price could tumble at any sign that Facebook’s management can’t unearth it.

© 2012 Johnson Strategic Communications Inc.

Facebook IPO: Should we “Like” it?

February 5, 2012

Yes, I know, investor relations people should be thrilled to see life returning to the IPO market in 2012 – and here comes Facebook, the biggest Internet IPO of all, to stir up interest in public markets. But I’m wavering on whether to click “Like” or “Not-so-much.”

I can’t help feeling that all the hoopla around the social media giant’s pending public-company status may be a sign of a frothy top in the stock market. I hope not – and I do wish Facebook success in its IPO. It’s a wonderful growth story.

The stock market has had a good run recently, despite some nervous days. The S&P 500 is up 110% since about this time in 2009. The Nasdaq Composite has reached a level it hasn’t seen since 2000, not the top of the dot-com bubble but the time when prices were still deflating. And the market may keep rising for now.

Two things bother me a bit about the Facebook IPO:

Valuation. The prices being bantered about seem a little unhinged from reality. Andrew Bary’s commentary this weekend in Barron’s is interesting:

The best businesses can be poor investments, if you pay the wrong price. That’s worth considering as Facebook readies the most closely watched initial public offering in years—a deal that could value the seven-year-old company at $100 billion. …

Assume Facebook comes public at around $40, a slight premium to its private-market price. That would value the company at $92 billion, based on 2.3 billion shares outstanding. At $40, Facebook would trade for 93 times trailing earnings and 25 times 2011 revenue of $3.7 billion. … If Facebook’s profit doubles in 2012, topping the 65% gain in 2011, it would earn 86 cents and trade for nearly 50 times earnings.

The FB offering brings back “eyeballs” as a major performance metric – in this case, Facebook’s 845 million users and the assumption that there simply must be ways to make lots and lots of money off of all those eyeballs.

Exuberance. That gee-whiz enthusiasm, built on a rising market and a technology so popular grandmas are using it to follow the kids’ activities online, is just a little scary. The New York Times‘ Jeff Sommer commented this weekend:

THE financial system may not be in great shape, but why dwell on it? Stocks are rising and I.P.O. euphoria is in the air. … Greed in the market is rising, and for some seasoned investors, there is an uneasy sense they’ve read this script before.

“It’s like we’re finally emerging from nuclear winter for I.P.O.’s but we’ve forgotten our history,” said Harold Bradley, chief investment officer for the Kauffman Foundation and a former executive with the American Century mutual funds. “If we don’t start paying attention, we’ll be making the same stupid mistakes all over again.”

If the stock market teaches anything, it is to keep historical perspective, watch the broader context of the economy and markets, and not bet too much on an upward-sloping line you can draw through the past couple of years’ performance.

Good news for investors is that Facebook’s S-1 filing reports five years of rapidly rising revenues and three years of real earnings, also fast-growing. So this isn’t an “idea on a cocktail napkin” IPO from 1999. But neither is it J&J or Procter & Gamble.

If I were the IRO for Facebook, I would be emphasizing three messages to investors:

  1. Revenue and earnings. We have ‘em, and here’s why they are sustainable. Investors should understand the varied revenue streams and their profitability. The IR story is about financial returns, not the social mission.
  2. Value for customers. Not the 845 million – users are essential but aren’t the ones who pay Facebook. The business is selling access to FB’s users to advertisers, application developers and the like. How much value does Facebook deliver to these customers – now and over the next few years?
  3. Durability. Investors must be concerned about what happens if Facebook’s “cool factor” wears off and users start taking photos and events and friends to newer, cooler platforms. Facebook needs to communicate its strategies for sustaining the dominant position in social media.

A friend tells me his worst investment decision ever was Apple: He bought AAPL at $15 a share and sold when it hit $35 – and he’s been kicking himself all the way up to $450. I must admit my investing instincts run in that same vein. Apple is a great example of “cool” staying cool – for consumers and shareholders. So Facebook may soar in its IPO – and continue to fly in the years to come.

What are your thoughts on the Facebook IPO?

© 2012 Johnson Strategic Communications Inc.

Should your CEO do social media?

May 10, 2010

George Colony, tech guru and chief executive of Forrester Research, packs an interview on Mashable with common-sense advice on how a corporate CEO should relate to social media. (Mashable is a news and opinion site devoted to Web 2.0.) The Forrester interview is a good read for investor relations staff and counselors.

Three factors are working against CEOs embracing social media, Colony says:

  • Age – the typical CEO grew up back when people talked
  • Regulatory constraints – the risks remain fuzzy around Reg FD and new media networks like Twitter (ignore Mashable’s mistake in transcribing SEC as FCC in the text)
  • Time – or the lack of it.

The Forrester chief paints this picture of what keeps most CEOs from engaging:

If you go to a CEO and say — and this is sort of conventional wisdom around being social — “We want you to make between five and six 140-character statements a day” — that’s 30 a week. “Then we want you to make one large statement per week — about four or five paragraphs.” And most CEOs would say, “There’s absolutely no way I could do that.”

There are two problems here: one is time. Calculate the time behind this and it’s about five or six hours — that’s a lot of time for a CEO. The second is that model — which has become almost an accepted model if you want to build followership — that model is unsustainable if you want to sustain quality. In other words: There’s not enough to say. There’s not enough wisdom in the world for one person to be wise over all those statements to fall over a year. That’s 1,500 short statements a year and 50 large statements a year.

Colony favors what he calls “social lite” – a focus on quality rather than quantity. A CEO might aim to post significant messages 6 to 8 times a year on a blog, and perhaps comment every 2 weeks or once a month on a short-message platform like Twitter. So when the CEO does speak, it’s a more notable event.

The Forrester chief also says CEO posts should not be written by PR people – but by the CEO. That’s the point of social media, after all – to engage personally in the conversation. To fake it isn’t authentic, to use another social media buzzword. And a CEO doesn’t get the benefit of listening if he or she isn’t even in the room.

My feeling is that public company CEOs wading into social media should get a quick review of posts from other members of the team – say, the CFO, IRO or Legal. The idea is not to scrub the humanity out of the CEO’s words – no “writing by committee” allowed. But we should bring in a second set of eyes to check facts and grammar – just to protect to CEO and the company’s brand in the marketplace.

For most businesses, I favor something more like a company presence in a blog or on Twitter and Facebook – blending voices from marketing and corporate, either funneled through a single person whose job is “telling the story” or coming from several contributors writing on different aspects of the company and its products.

Colony estimates only about 10% of CEOs are ready to do social media now. In the next 10 years, that may grow to 50%. But he urges companies not to rush it:

I would say if you’re interested, explore — but do not force it. If you do not have the proclivity to communicate, to be a little bit honest, a little bit controversial, then I wouldn’t do it. I wouldn’t force it.

That view jibes with where most companies are now on social media – especially firms that are not in the tech business or that have small cap resources. It’s time to listen, explore, develop skills and resources – and “go social” as you are ready.

What’s your feeling on CEOs and social media? (Click comment line below.)

© 2010 Johnson Strategic Communications Inc.

Investors, golf, cancer & social media

May 7, 2010

Two communication folks from American Century Investments, a mutual fund firm with about $60 billion under management, gave a great talk today at the Social Media Club of Kansas City on an online campaign building the company’s brand.

As investor relations and corporate communication people at many companies are exploring social media – dipping our toes in the water – I thought I’d share some lessons from the American Century experience. They’re privately held, but dealing creatively with interactive new media in our highly regulated financial world.

Brent Bowen and Jamie Needham of American Century gave a case study on the American Century Championship celebrity golf tournament at Lake Tahoe – and what the company does to promote its brand through social media from the event.

Of course, the event starts with some advantages. This is golf, with a network TV audience that also can be online. The tourney draws celebrities ranging from Charles Barkley to Ray Romano. They’re playing because the event is a benefit for Lance Armstrong’s LIVESTRONG campaign against cancer. And golf is somehow woven into the DNA of many investors – American Century’s audience.

So it’s a natural. But the American Century team did a nice job with social media approaches that I think would fit for small or large companies – even firms that can’t bring Michael Jordan to their event. A video is available here (uncut, so fast-forward to ~12 minutes to skip Social Media Club housekeeping stuff).

My own interpretations from the American Century experience:

  • An event helps ignite the online conversation. To get people you’re not paying to start posting on Twitter or their Facebook pages, you’re best to tap into their interests with something that’s happening. Could be an earnings announcement, but don’t expect that one to go viral. Social media focus most easily on events that build corporate brand awareness or help launch products. IR is a smaller part of the picture – but should be present.
  • A feel-good cause gives momentum to a social media campaign because people get excited about doing good more than about a company making money. American Century wisely put all the emphasis on LIVESTRONG and helping cancer patients – all except, of course, that the event is called the American Century Championship. People who are online get excited about supporting cancer patients in the battle of their lives. Or about their favorite sport. Or an art show or concert. Or defeating hunger or disease.
  • Listening comes first. American Century started with “no social media presence – no Twitter account, no Facebook account” – Brent says. They began by searching out 20 to 25 key words in the online interactive space. What are people out there saying about us, our cause and our partners? They asked people in the industry what they want to hear – and the answer was, in addition to just investment products, to learn what makes the company tick. Investment people asked for that softer side, in other words.
  • Plan the content. As Brent says, “Content plan, content plan, content plan.” Sure, tweeting looks all spontaneous. When people post to Facebook it’s personal and folksy. YouTube videos capture those wacky moments. But the corporate message comes through because it is planned. Spontaneous stuff comes from being flexible in addition to following the plan.
  • Legal can get comfortable with social media. American Century puts on webinars in which its investment officers help the investing community understand what’s going on in the markets. The communications team decided to “live tweet” a webinar – which means giving a series of 140-character messages summarizing what the speakers say, as they say it. Anyone who follows @AmericanCentury gets the tweets in real time. The “story behind the story” is that a compliance officer sits next to the person doing the live tweeting – it’s real-time compliance review. Hey, IR could do that.

If you’d like more, watch this morning’s video or explore American Century’s golf tournament site. Congrats to this Kansas City company on a cool national event.

© 2010 Johnson Strategic Communications Inc.

Word of the year: “unfriend”

November 17, 2009

The word of the year for 2009, according to the New Oxford American Dictionary:

unfriend.

This says something about our society and the social media we’re all embracing. Relationships of a certain sort are, well, un-doable. Someone can friend or follow you on Facebook, Twitter or LinkedIn, and either person can exit just as easily. Friending and unfriending can be entirely impersonal.

Now, I won’t say crack any cynical jokes about relationships with investors. My observation for the day is simply that we are all looking for real relationships – in our personal lives, business dealings … and our investor relations jobs.

Social media play a role in supporting all of these relational areas of life. But the simple act of friending or following or connecting isn’t much of a relationship. Talking with each other over time using whatever medium, listening, supporting – dare we say, investing time and effort in each other – makes a relationship.

Let’s be social in our investor relations outreach, but let’s build real relationships.

This space not for sale

October 9, 2009

NoSaleSignThe Federal Trade Commission this week jumped into a controversy that has been swirling in social media circles: “Pay for play” – the practice of companies or PR agencies paying bloggers, Twitterers and other online “influentials” to endorse or mention their products or services.

This FTC action focuses on people selling products – not pitching stocks. But the intervention in the online marketing world has important implications for online promoters of investments, as well. More on the investor relations side in a moment.

What the FTC did was announce new guidelines requiring disclosure if companies pay online chatterers, or give them free products, for endorsements. (FTC announcement here, old media take on it here.) So faking a word-of-mouth or “viral” phenomenon gets a bit harder. FTC explains:

The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. … And a paid endorsement – like any other advertisement – is deceptive if it makes false or misleading claims.

For the record, this space is not for sale, regardless of FTC guidance. I have, in fact, received a couple of offers from IR service providers – but getting a paycheck isn’t the reason I’ve chosen to take part in the conversation through IR Café.

My ethic comes from years of working in the Old Journalism of daily newspapers. When I was a young reporter, one of the newsroom characters was a City Hall reporter known for, among other things, refusing to take a donut at the weekly City Council meeting because he never wanted to place his objectivity in doubt. A journalist who accepted freebies from someone he covered would be drawn and quartered, usually in a public flogging through a news story about his termination.

So I got the message: Journalism is about delivering information for the readers’ benefit; advertising is about being paid to deliver messages for advertisers’ benefit. Publishing ads is all well and good. But if you want credibility, the lines should not be blurred – as they increasingly are, both online and in traditional media.

I value credibility more than a buck, which is why I headline a post “This space not for sale.” If our firm tries to sell you something, you’ll know it.

Now, I have mixed feelings about the FTC sticking its nose into what has been a wide-open space on the Internet. Does freedom of speech extend to someone tweeting “Wow U have to try this new digicam from CoolVideo.com, best ever and an awesome Christmas gift, too!!!!!”  I don’t know, that’s marketing … or maybe constitutional law … a question above my pay grade, as the President says.

When it comes to investor relations, I have a clear opinion: Pay for play is not a good idea. Investors are smart enough to see through a paid profile in a publication or website aimed at investors, and it can hurt rather than help the company’s credibility. And people shouldn’t be touting stocks online (or touting the short side) for pay, period. Companies and IR or PR firms should steer completely clear of that practice – regardless of regulation. It’s a matter of integrity and credibility.

Securities laws outlaw market manipulation and misleading information, of course. I’m no expert on the Securities and Exchange Commission, but as interactive media play a growing role in capital markets, it wouldn’t be surprising to see the SEC take direct action to require disclosure of payments to bloggers or other online chatterers – just as analyst reports must disclose the i-banks’ interests in companies covered. It might even help clean up the markets.

What’s your opinion on the integrity – and freedom – of online discussions?

Not feeling ‘social’

October 5, 2009

Forty-nine percent of companies do not have a specific approach or policy on employees’ use of social media on behalf of the companies, according to a survey reported in the October 2009 PR Week (link here, but requires subscription).

Jim Tsokanos, president of North America for MS&L, a PR firm that sponsored the survey with PR Week, comments:

When we live in the world of the empowered consumer and everyone has a point of view, and they share it at the speed of light, for companies to not have policies in place to guide how social media can be utilized by their employees, I thought was very interesting.

You can tell he’s in PR: Dangerous might be a better word for half the companies lacking policies on social media use. The risk is especially acute for public companies, who could face serious disclosure issues or ethical breaches in a tweet.

As I’ve suggested before in IR Café, public companies need to develop policies on who can use social media to discuss the business and guidelines for how. (Links to examples of social media policies at this post.)

Investor relations professionals ought to offer input on social media, at least to address the defensive compliance issue – and, getting radical here, also to include the financial community proactively among audiences served via social media.


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