Social Media, the new wave in research for investors.
Times are changing, and Social Media is taking by storm the way we do everything. We now date through Social Media, keep in contact with our peers through Social media, have meetings through Social Media and even do research, ask for answers and recommendation through Social Media. There is a new wave of research coming our way that is being fostered by the younger (40 and under) investors in our community; this is making financial and investment research through Social Media.
As stated by the website Inside Investor Relations in there article “Social media flourishes in finance despite workplace blocks”, 60% of people interviewed say that they regularly checked social channels in order to research investments. This number is really encouraging for us that are trying to advocate for Social Media usage as a “Best Practice” in Investor Relations, because it is telling us that the users are listening, it is telling us that if we put something out there, our target market will be listening to us.
The next question that comes to my mind, is what type of information are, the users looking for in the social channels? I believe they are looking for any kind of information that can support the numbers they can find in Bloomberg and the editorials they find in Seeking Alpha.
Social Media is becoming such an important source of information, that spinoffs of social media sites are arising that are completely concentrated on investors. Two very good examples of this are: StockTwits and Stockr.
StockTwits is a financial communications platform for the financial and investing community. This platform is built on top of Twitter and therefore through this social media you can check what is being said about a certain company by performing a search on the “$Ticker” tag for the company you are looking for (example: $AAPL to see what is being said about Apple in the “twittersphere”). Being that this platform is built on top of Twitter the information given to you is limited to 140 characters at a time. Because of this, StockTwits is a great platform to get quick facts about how a company is doing, at a precise time.
Stockr is a social network for people interested in the stock market. Stockr uses a Facebook like social infrastructure where you get to follow users who you believe can help you make an investment decision possible. Apart from following your peers, you can also follow companies and monitor what they have to say. In comparison with StockTwits, Stockr is much more personal and it is targeted to getting conversations with your peers started about certain companies or trends that are emerging around the channels you are interested in. I see Stockr as somewhere I would go and post a question and see what other people interested in the stock or the channel have to say about it, it might turn into a great place to get “crowd advice” about an investment decision.
These are just two of the platforms that have flourished from the usage of social media as an investment research tool and I believe there are many more to come. Companies are now starting to use different channels to diffuse information, videos through YouTube, facts through Twitter, photos through Facebook and with the SEC ruling about dissemination through social media, the possibilities just grow.