Your public company’s latest earnings statement, press release, or other positive news story may be composed and is ready to disseminate. You file it with the SEC, email it to the newswire service of your choice, and perhaps post it to your company website. You’ve met the open public disclosure requirements — right now what? If you are not really a large, highly visible company who receives ample coverage within the media, how do you attract the interest of the investment neighborhood?
In 2008, the Securities and Exchange Commission released a guidance report on the use of company websites for supplying information to investors. They recognized that technological advances allow for greater speed and width when delivering reports and news towards the investor and the markets. The SEC also recognized that investors are increasingly embracing electronic media, company and third-party websites to read information about current investments and look for new opportunities.
This was a huge part of the right direction, and we agree, with this shift in the dissemination and communication process, the information about your public company must be present on your website as well as other financial websites and social networks where investors, analysts, and the financial press are active.
So again we ask, how can less visible micro-cap to mid-cap businesses overcome this void in media coverage, expand awareness, and become known in the investment community? One way is social media. There are those who continue to shun social networking and deem it being an ineffective tool. However, it’s usage for investor relations is being increasingly studied, and progressive companies who’re listening, experimenting and adapting to this trend, are leveraging the power of social networking quite successfully.
One corporation who has recognized and embraced the advantages of social media on a global scale is Roche, a leading healthcare company headquartered in Switzerland. Roche (@Roche_com) uses their Twitter account to post about their products, research, earnings and corporate news. Their Twitter profile includes a link to their corporate website social networking section which features links to other social network profiles, tabs for investors and the media, and contact information for the relevant departments.
Granted, this is one of these large corporations we wrote about within our last post who handles IR internally, but do not discount social media’s effectiveness in investor relations for smaller companies. In fact, the social media platforms — Twitter, Facebook, YouTube, Linkedin, etc. — are tailor designed for the small to mid-sized open public company, with Twitter proving to be the most favored dissemination channel for IR by these classifications of companies.
One error we have seen several companies make who do want to use social media to -push- investors and financial media for their news and information is they hire a company experienced in social networking, but not knowledgeable in current capital markets. A deficient marketing program can lead to a lack of volume/liquidity along with a lower stock price, which means the company may not receive the influx of capital needed to reach projections. This is detrimental to the company and often depletes their own marketing budget.
Building liquidity for a public company’s stock requires consistency and time, and should be entrusted for an Investor Relations firm who offers thorough knowledge and experience in the securities and multimedia advertising industry. An established IR team who has the expertise to effectively tell your company’s story, and professionally act as your communication liaison to existing shareholders and prospective investors will serve you best in the long term.
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