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What does Social Media mean to Investor Relations

👤 🕔 April 17, 2013 0

Social media has been gaining influence over our daily lives. Twitter is the fastest source of breaking news. Facebook is the main hub of social activity for many people. And YouTube has turned into a video record of ordinary lives.

From a business point of view, social media impacts how we engage with the people that are interested in our company. Twitter aids us in propagating our thoughts and news. Facebook functions as an extension of our website where people can see what we are up to and swear allegiance to our cause. Social media is so important that followers and likes have become an important metric for many Internet marketing professionals.

But how about investor relations? Has social media impacted the way companies and investors interact? Until a couple of weeks ago, I would have thought that this was debatable. Information that was released to the social media platforms by publicly held companies was, most of the time, not up to date and important investors had already seen this information through press releases.  Social media hasn’t been as relevant as a news or other traditional investor engagement platforms.

That is about to change. On April 2nd 2013, after investigating a Facebook status from Netflix CEO’s stating that they had streamed 1 billion hours of video during the previous month, the SEC issued a report detailing that companies can now use social media platforms such as Twitter and Facebook to disclose information. This is as long as the investors are alerted which platform and account these disclosures will come from.

This recommendation from the SEC will change the way investors relations will be performed especially for the junior companies. Now these companies won’t have to spend thousands of dollars publishing a press release every month, they will be able to keep press releases for really important matters.

For investors this is also a big change and I believe it is a change for the better. Investors will now have the opportunity to be more engaged with the company. The use of social media allows the investors and companies to create a more engaging, real time connection. Investors will be more up to date on what is going on in the company while the company will be able to be more transparent about its daily actions.

It will take some time before the full effect of social media entering in to investor relations, but I believe it is just a matter of time.

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