This Facebook post (By the CEO of Netflix) was the straw that broke the SEC’s back in realizing that social media was a fair and appropriate platform for sharing & disclosing investor news and information.
The community and market (Netflix: $72.45 to $81.72 in 24 hours from this thread) reacted favorably to this Facebook post and now it’s officially a legal means to share investor news for any brand. Rapid information dissemination that can possibly be reflected in stock prices is quite the ROI.
Historically, the challenge was that the web and social properties were not accessible platforms for all investors and everyone would not be exposed to company “material” information at the same time. This no longer holds water; even your great aunt Millie has access to the web and, perhaps, a Twitter handle (maybe). The caveat to the SEC ruling is that companies must first inform investors of the social media platform they will use to disseminate company information and personal social platforms are exempt (e.g., use or introduce a company page, not the CFO’s personal Facebook page) – this disclosure can be conducted with a press release, 8K and earnings call announcement.
With that said, here are a few key takeaways companies should keep in mind while attempting to adopt an investor relations social media strategy now that the playing field has opened up for all:
- One size doesn’t fit all, there’s work that needs to be done by taking on this effort, including: resources, listening, content planning, legal review and more. This isn’t different than a non-investor approach, just more guardrails.
- Bankers and analysts are using social to both curate and aggregate company information for banking purposes. From an institutional perspective, your core audience is listening and savvy.
- Heavily retail held? That’s not a problem, but prepare a response matrix and set rules for the community on what you’ll respond to and engage around.
- Like Reed Hastings, if your C-suite is ready, willing and able – this is a great message to introduce executives around and build some personal voice for the news.
- Quickly release nuggets of information; IR people now have a means to share information that didn’t merit a release or 8K and could not wait until the next big K or Q.
- Integrated investor news with company reputation news; broaden the perception of the brand with the right content opportunities.
- The brand’s employees on using social media, this can be a great way to enable more access to company financial news and strategy
- Perception can be contagious, being an early adopter is a great way to build affinity.
This is new for brands, so carefully consider the above implications for brands and strategize how to approach this exciting opportunity.