The ever-expanding IR social media toolkit
The capital markets are still reeling in the wake of the extraordinary situation that emerged at the beginning of the year, when users of a Reddit sub-forum banded together to put a squeeze on funds shorting video game retailer GameStop, pushing its share price up a massive 2,700 percent to $483 in the space of weeks.
Though there were plenty of column inches in the Wall Street Journal and the Financial Times dedicated to unpicking what had happened – and why it might be significant for retail shareholders in the future – there was little attention paid to the plight of investor relations professionals.
Here was a nightmare situation unfolding away from the company’s watchful eyes, offering little opportunity to reach potential investors with the most cursory contact, let alone to properly engage. With this in mind, IR professionals would be well advised to have a handle on some worst-case scenarios that may be bubbling away on other social media platforms.
TikTok Though the world of TikTok’s dance videos, lip syncs and in-jokes may be incomprehensible to anyone over 25, you should be aware that ideas can spread like wildfire on the platform. A particularly canny activist investor may, for example, decide the best way to target your company’s debt problem would be to coin the ‘bond dip’, an exciting new dance move.
Even though the kids might not be expecting it, the obvious illustration of a worrying yield curve could go viral without intervention. Consider getting your younger team members to come up with counter-dances, or a humorous take on a rival CEO’s words at his/her firm’s latest AGM. Just try not to die from embarrassment in the process.
Alternatively, check out the #StockTok hashtag, where young investors are already educating other TikTok users on how to invest.
Facebook After Facebook banned news from Australian publishers – only to reinstate it shortly later – a new model may be emerging where Facebook pays outlets for their content to be displayed, hopefully improving its reliability. Consider getting ahead of this curve by pricing your earnings releases very reasonably for publication, but beware the hedge fund that will take a lower price to have its research on your firm’s shortcomings displayed more prominently.
LinkedIn Most of us are familiar with the LinkedIn ‘humblebrag’, where a user of the corporate social network will make vague allusions to his/her ‘winning attitude’ or ‘pre-breakfast workout routine’ as the root of his business success. Any groups joining forces to buy – or short – your stock may use similarly roundabout language to discuss their acquisition, so stay vigilant for anything that looks like it could be talking about your company.
Then again, the user’s ‘latest buy destined to deliver big returns’ could just be his/her new Keurig coffee maker.
Clubhouse The invitation-only, audio-based social media platform is one of the new kids on the block, but is already championed by Tesla founder Elon Musk, so is poised to hit the mainstream. The app lets users listen to conversations, interviews and discussions between people they are interested in – much like a podcast, but with a virtual velvet rope of exclusivity.
In fact, a number of IR professionals are already experimenting with how they might use Clubhouse, starting with weekly discussions about ESG. But before you try to get a member of your C-suite an invitation, beware: there are concerns over Clubhouse’s use of unencrypted recordings and connections to Agora, a firm that manages its back end but is based in Shanghai. Getting ahead of this particular curve may be a little risky.
