Forty-five percent of small-cap companies have seen an increase in their retail shareholdings in the past year, according to IR Magazine research. Garnet Roach hears how some companies are adapting their IR for the Reddit generation
‘Corporate communications is changing,’ declares Galina Meleger, director of IR at Endeavour Silver and winner of the rising star trophy at the IR Magazine Awards – Canada 2021. Meleger says that while the traditional approaches to IR, including ‘trade shows and phone pitching’ remain effective, in the Covid-19 era and particularly when it comes to attracting the attention of younger retail investors, she felt a different approach was needed.
Today she has a ‘digital everything’ approach and credits it with delivering a record year across all IR metrics. ‘I realized that digital marketing allowed me to cast the net much wider, if I put it all together,’ she explains. Her approach is not just about posting press releases and filings to Twitter once a quarter, of course. It is a thought-out, paid social campaign that has been hugely successful.
Facebook friends When IR Magazine looked at the retail landscape in a dedicated report earlier this year, almost three in 10 companies reported an increase in retail investment in the past 12 months, with a heavy emphasis on small-cap companies. In fact, 45 percent of small-cap firms say they have experienced an increase in shares held by retail investors in the past year. And communicating with these shareholders was noted as a particular challenge for smaller companies.
Meleger, who says Endeavour Silver’s shareholder base is 70 percent retail, decided that Facebook was the right fit for her campaigns, though she adds that it’s a seemingly overlooked channel for much of the IR world. ‘I’ve had a tremendous amount of success with Facebook targeting for new investors,’ she says.
Facebook, she explains, is ‘really effective for its simple and easy business model of $1 per like or follow, and has partnerships with Google, Experian and Oracle for data mining.’
To make it work, Meleger says ‘you need a well-planned advertising strategy, you need to be able to continuously create in-house content to pump out posts on social, and you need to be good at photography because it’s a visual experience.’
To have access to enough information to create the volume of posts she wants, she ‘deconstructs content’ from news releases verbatim, promotes upcoming events, shares industry news and repurposes content from the firm’s sustainability report to drive visibility around what the company is doing on ESG.
Meleger says making social a success is not difficult – and it has certainly been a success for Endeavour Silver.
Listing a string of KPIs that have seen a significant boost off the back of her social campaigns, Meleger notes: ‘Since I started the program, I have seen a 300 percent increase in my website traffic. I do pixel drops [to track traffic] on the investor section, so I know that is now the most-visited area of the website – it was previously the careers section.’
She adds that before her paid social campaign kicked off, the firm used to see 3,000 downloads of the investor deck per year. ‘Now there are 12,000 downloads,’ Meleger says.
Endeavour’s virtual outreach is translating into new stockholders, and Meleger’s interactions with investors highlight the reach of these campaigns. ‘I get phone calls from investors in cities or areas we’ve not marketed in, who tell me they heard about us through social or digital outreach,’ she says. ‘They tell me our social campaign allows them to see deeper into the company.’ She adds that ‘many investors that have not met us face to face, only through virtual outreach, have purchased stock this year.’
And all that for what Meleger estimates is currently a campaign spend of around $1,000 a month.
Marcin Droba, LiveChat
Let’s chat Another firm that has embraced social, but has a far smaller retail shareholding (around 4 percent), is Polish software company LiveChat. Everyone recognizes the LiveChat text box used for customer service conversations around the world, but at LiveChat the company, you can use that tool to talk to IR.
‘We are a B2B company and our customers have their own customers,’ says Marcin Droba, head of IR at the Wroclaw-headquartered firm. ‘And one thing we try to convince our clients to do is to be where their customers are. If their customers want to communicate through a certain channel, they should be available on that channel.
‘If your customers want to communicate with you through your website, that’s great and you should have LiveChat for that. If they want to communicate by email, you should give them that opportunity. If they want to communicate via Facebook Messenger, then you should allow them to do that because it is to your advantage to be on the same channels as your customers. And we take the same approach to IR.’
Following this ‘communicate through all channels’ approach, Droba realized that some investors wanted to communicate via Twitter. ‘They wanted to interact with us, they started conversations and they asked questions,’ he says. ‘Today, I feel we have a good level of interaction on Twitter. It’s clear that some investors like that channel, either to ask questions publicly or through private messages.’
Droba thinks LiveChat’s IR Twitter account has been a success partly because the firm takes a ‘less official’ approach. ‘For us it’s not only a channel for communication, but also about building a community,’ he explains, adding that this applies to the IR team as well as the investors it interacts with on social media. ‘It’s very motivating for us.’
Retail investors in Poland are not very active, Droba adds, and conversations can be heavily focused on forums, where few questions are asked but lengthy discussions take place that aren’t necessarily very productive. Through the different channels it uses to talk to investors, and Twitter in particular, he says LiveChat is encouraging retail investors to be more active – especially since everything has gone virtual and AGMs are easier than ever to attend.
‘It’s great when an investor contacts us using LiveChat,’ says Droba. He explains that not only is everyone in the IR team obviously very comfortable using the company’s flagship tool, but that everyone in the company has also spent some time in the support department ‘because we want people to really know how our solutions work.’
But he adds that in his view, the interactions the team has on Twitter have the potential to create advocates for the company.
‘The types of investors we talk to on Twitter are active and interested,’ he says. ‘When I talk about them becoming advocates for the company, I don’t mean going out and telling people to invest in LiveChat; what I mean is that these are investors who like to share their knowledge. So when I respond to a question on Twitter, I’m confident that person will spread the information, giving it a wider reach.’
Galina Meleger, Endeavour Silver
Ask away What better way to sum up IR in the age of the Reddit retail investor than to hear from a company that signed up to do a Reddit Ask Me Anything (AMA)? And Axon, a leading provider of public safety technology including police bodycams – as well as being the company that created the Taser – has done not one but two of these.
Andrea James, senior vice president of corporate strategy and investor relations at the Arizona-headquartered company, says Axon’s experience highlights how ‘what’s good for institutional investors can also be good for retail, and vice versa.’
Speaking on an IR Magazine Webinar panel in April, James said Axon's first AMA, in which CEO Rick Smith talked about ‘wanting to make the bullet obsolete’, hadn’t really involved IR. ‘But what I found is that some of our largest institutional shareholders really enjoyed it,’ she noted.
And even though James hadn’t been involved in the AMA, she says shareholders enjoyed it so much that IR ‘ended up leveraging [that Smith did that first AMA] in our ESG report for shareholder engagement.’ She says the AMA made it clear to investors that Smith, and the company, really cared about these issues.
Then came 2021 and all that arrived with the GameStop rally. While Axon wasn’t part of that, the company had been targeted by short-sellers in the early 2000s, explains James. ‘There was a mole within the company: it was just a fascinating cloak-and-dagger story,’ she relates. ‘So Rick decided to publicly tell that story on Reddit.’
It might sound like a brave act indeed to put your CEO at the mercy of Redditors, but James says it’s all about the risk-reward profile of your company, and doing something like an AMA needs careful consideration.
‘Before you engage with a community such as Reddit… your management team needs to have a really honest conversation with itself,’ she says. ‘The senior managers need to ask themselves, So if we get asked the question we most fear, are we willing to answer it in a public forum?’
Andrea James, Axon
Because of how AMAs work, where popular questions get ‘upvotes’, James says you can’t control what questions rise to the top. ‘If you ignore the hard stuff, they’re going to know,’ she explains. ‘You have to be willing to engage with that hard stuff.’
In fact, James points out that Reddit offers much more nuance than is available somewhere like Twitter, for example. ‘As a company, we tend to favor formats that allow room for nuance,’ she explains, adding that while the spotlight in recent months has been on some of the more dramatic goings-on on Reddit, many of the site’s communities are actually very thoughtful. And for Axon, ‘being able to talk thoughtfully about what we do, and the technologies we sell, is a strength.’
'Most people don’t know that Facebook has very strong data for targeting new investors,’ says Galina Meleger, director of IR at Endeavour Silver. ‘This was especially important last year in the pandemic, when US households bought more than $200 bn in individual stocks and retail investors accounted for nearly 25 percent of all equity trading.’
Talking to IR Magazine, Meleger shares her criteria for targeting retail investors on Facebook:
‘We target geographically, covering the US and Canada in the financial/business-driven states and provinces, and users aged 20 and upwards with the assumption that these people have more disposable income to invest.
‘We then use a combination of targeting strategies including:
