Posts Tagged ‘Facebook’

What a week, eh?

May 25, 2012

The week leading up to our long weekend in the U.S. gave investor relations people plenty of reasons to pause and consider what our profession is about:

Facebook faced issues with its IPO – including a brouhaha over the analysts for Morgan Stanley and three other underwriters lowering their estimates in the middle of FB’s road show. Some commentators call for SEC regulations to require investment banks running IPOs to disclose their analysts’ opinions broadly, not just to their favorite institutional investors. Something about a level playing field.

Reuters says Facebook told the analysts they’d better bring down their revenue and earnings forecasts, a wink-and-nod sort of investor relations not regarded as acceptable in recent years. Something about Regulation FD.

People care because the IPO lost its sizzle on the very first day, then dropped further. FB shares closed this week 16% below the IPO price. The Financial Times has a good narrative. Poor Wall Street. Poor Mark Zuckerberg. Poor speculators.

The hounds of the plaintiffs’ bar are in full chase, of course, barking loudly and threatening in all directions. The SEC and Congress are investigating. As a high-impact disclosure issue, this will be one to watch.

JPMorgan Chase continued to convulse over its trading loss of $2 billion, or is it $3 billion, or … whatever the amount, reputational damage exceeds the financial loss.

From an IR perspective, at least two aspects of JPM’s debacle are interesting:

  • The disclosure (or lack of disclosure) of the risks JPMorgan and its “London whale” were taking – and the losses they incurred. IR people should take a close look and consider how we would treat similar setbacks in our companies.
  • Corporate governance concerns came to a boil over doubts about the JPM board’s risk-policy committee and whether it had the right stuff to actually oversee risk for what is, basically, a huge global risk-taking machine.

Washington stalwarts, once again, are calling for new laws and regulations to codify the good sense that the old laws and regulations haven’t quite brought about. And we’ll be treated to the spectacle soon of Jamie Dimon going before Congressional panels to be used as a prop for politicians’ campaign videos. Oh, well.

General Motors filed an amendment to its proxy statement today noting that it “recently learned” of a related party transaction last year that it hadn’t disclosed.

GM says CFO Dan Ammann’s wife is a partner and COO of an advertising agency that got about $600,000 from a GM subsidiary in 2011 – and he didn’t know about it, so it wasn’t in the proxy. The deal was reported in AdWeek last fall, according to the Detroit Free Press, but apparently the $600K eluded the proxy writers. Oops.

Executive compensation remains a lightning-rod issue, especially in an election year. Plenty of misinformation is floating around, including this misleading headline from Associated Press: “Typical CEO made $9.6 million last year, AP study finds.”

You have to read way down into the story to find that AP’s sample included only S&P 500 companies, the largest cap companies in the U.S. market. Actually, AP had data from only 322 that had filed proxy statements through April 30. The other 7,000-plus publicly listed companies in the United States? Not part of the study.

None of my clients’ CEOs has $9.6 million in compensation. How about your boss or clients? But the AP headline paints with a very broad brush: “Typical CEOs …”

The AP headline might have said: “Large-cap CEOs made $9.6 million …” As it is, politicians trading on Joe Sixpack’s envy will just run with the anti-CEO broadside.

And companies will deal with the widespread assumption that CEOs and other execs are paid too much. Investor relations pros need to focus on providing the real numbers and explaining – in plain English, not legalese – why pay is what it is.

What do you think?

© 2012 Johnson Strategic Communications Inc.

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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.

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.

Social media: Be a leader

September 18, 2009

Thinking a little more about investor relations engagement in social media (or hesitancy to engage), I believe IR people should step forward and offer some leadership in strategy and policies for corporate and employee involvement in the interactive Web. This is not to say take over, which IROs don’t have time to do and other departments would resist. But offer input, show thought leadership.

This issue came up today among IROs in a webinar on social media and IR organized by Bulldog Reporter’s IR Alert. I spoke on the panel but thought I would pull some thoughts – and resources – together to offer readers of IR Cafe.

Two compelling reasons for IR to lead internally and help shape the strategy:

The message. I think of IR as one of the keepers of the corporate brand. Who are we, what’s our story, what do we mean as a company, how do we create value in the world? The CEO, of course, is communicator-in-chief. But the IRO should be nearby, helping to clarify and deliver the message.

Yes, I know – the products are where the money comes from, so brand managers and marketing communications people often drive the agenda for media of all sorts, which now include Facebook, Twitter and the like. Most social media efforts spring from marketing, customers service or PR.But consider the audiences.

But communication strategy has to flow from understanding our audiences. We have customers, who may be learning about our products – or talking about them to friends – on networking platforms. We have employees, who may be talking about work and the company on social media sites. And we have investors – the IR audience – who own the company, after all, and increasingly are using social media to learn about it, in addition to the company website and traditional sources.

Go to search.twitter.com, a small but easy window into social media, and look for your company or big products. When I do this, I find a significant amount of chatter is on financial matters – investors trading links and opinions. We need to be sure the corporate story, the value-creation story, is reaching these audiences.

The risks. One role of IR within a company is to play gatekeeper – to be sure no one blabs the material information before the company properly discloses it to broad audiences. The IRO is, among other things, a Regulation FD gatekeeper.

Do we need to say what the risks are in social media? It’s a wild and woolly space. Consider the confidential information an employee might let slip, unthinking: We’re all excited about this new product that starts shipping November 1 … Everyone’s afraid of losing their job, because sales have just been tanking this summer … My division is being combined with this other one … The CEO had a heart attack.

I’m no lawyer, but what I’ve heard from several attorneys – including Ben Orlanski of Manatt, Phelps & Phillips on the webinar today – is that the same securities laws and SEC rules (reg FD!) apply to social media as everywhere else. So IROs should be involved, both in developing policies and in day-to-day activity, to guard against selective disclosure by the company – in Web 2.0 as well as other forums.

The other social media risk IROs talk about is the crisis. What happens when rogue employees post a YouTube video doing gross things with your pizza? Or angry soccer moms start tweeting and Facebooking about your TV commercial? Social media platforms spread information – true or false – rapidly and uncontrollably. That pizza video reached 1 million-plus viewers in three days, and investors were in the audience – the stock price dropped 13% (it has recovered). Crisis management is a topic unto itself, but the risk is reason to be prepared.

How to lead. As with so many areas of corporate policy and strategy, the influence of an IRO or outside agency is mostly informal – getting up to speed, reaching out internally to build support, be an active participant in a team. In the case of social media, that means working with Legal, Finance, Marketing, PR, Customer Service.

To me, decisions of where and how to engage in social media – blogs, Twitter, Facebook, there are hundreds of channels and tactics – are questions of strategy that each company must answer for itself. And no two approaches will be identical. But the necessity of thinking through the policy issues applies to every company.

Most public companies have disclosure policies, a giant “business conduct policy” and/or an array of policies covering various areas of employee conduct. Social media are relatively new, but already huge. So companies really need to update their policies to cover involvement of the company and employees in Web 2.0.

I’ve scanned some social media policies of big companies. The ones you can readily find on the Web are from tech companies, who have embraced the culture of sharing their information (even internal policies) online. Take a look at these:

I like Sun’s best among these, because of its plain English and subheads that guide the employee through it. Some business conduct policies are too lawyerly for most employees to get the message (or may even spawn little rebellions).

Charlene Li, co-author of Groundswell, has been preaching the “We need a policy” message for a long time. In a post from way back in 2004, she offers a simple example of a blogging policy, with links to more resources. So if you don’t have a policy that includes up-to-date thinking on social media, you need to catch up.

Communicating with the capital market has always been about using different channels to reach various segments of the investor audience, and IR 2.0 is here.

(Some previous posts and resources on this blog: IR 2.0 – A Menu linking to resources by topic, IR Website Checklist of what should be there, Tiptoeing into 2.0 on trends in corporate engagement, Twitter for IR? thoughts, Social media, reputation & IR, and Social media strategies: Talk, listen … or? Or go to the right side of this page, find “Browse by topic” and click IR 2.0 – Web & social media.)

Please comment with your ideas or links to social media & IR policies or resources.

Good news is, we’re all learning together. Have some fun along the way!

© Copyright 2009 Johnson Strategic Communications Inc.

Social media: Go there

September 17, 2009

Social media guru Brian Solis, principal of Silicon Valley PR firm Future Works, visited the Kansas City chapter of the Public Relations Society of America (PRSA) tonight – bringing the message that interactive web platforms are transforming the way companies communicate with their publics.

Brian comes at social media from a branding and public relations perspective, and his PR 2.0 blog is well-known. His first engagement in social media was selling digital cameras through the old bulletin boards and forums of the 1990s. And he still approaches the topic looking for measurable impact on sales of products.

As an investor relations practitioner focusing on communicating with financial audiences, I see most companies struggling to come to grips with social media. Web 2.0 is a threat to corporate reputations – and an opportunity. Most companies are still experimenting and trying to clarify their strategies. Some are in full denial.

Several messages that Brian shared stuck with me:

  • We are moving into this uncontrolled, overstimulated world of social media. Like it or not, customers and investors and employees are talking about our companies in blogs, on Twitter and Facebook, with videos on YouTube.
  • Most companies and communicators are struggling to find the best ways to participate in social media to connect with their audiences. “We’re all sort of equal in terms of what we don’t know,” Brian said. This was reassuring to hear from a guy who’s been at it since before Facebook, Twitter, etc. existed.
  • There is great value in personally visiting social media sites, searching for your company and brands, and listening to what people say. We should know who the influential reporters, bloggers and Twitterers are in our industries. By monitoring, we can calculate sentiment, garner feedback and get an early warning on crises, he said. Observation and data come before engagement.
  • Companies need to address the organizational issues of social media. In a couple of years, all areas of our companies will be using networking platforms, one way or another, Brian said. It’s inevitable given the rapidly rising public use of websites for networking, content creation and sharing.

Brian noted that his contacts from companies seeking help come from different departments: Customer Service, Marketing, IT – not just PR (usually not IR, I bet).

As communicators, we should come to grips with policy issues raised by new media and put tools and procedures in place for people across our companies. As IR people, we need to lead in planning for disclosure and capital market impacts.

Update: See also a post on this topic by Dan Schawbel on the PR 2.0 blog, and a neat post by Laurel Papworth, an Australia social media strategist, with lots of examples and links to social media policies (thanks to Dan for the link to her blog).