Twits and Stones May Break Your Bones

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As the year begins to wrap up and office parties kick into high gear, I wonder what next year holds for the world of investor relations.  Proxy access, say-on-pay and XBRL were widely discussed topics throughout the year, but none may have reached the feverous pitch more than the use of social media in investor relations; and that trend will likely continue in the New Year thanks to a recent development.
Last week, Yahoo! Finance launched a feature called “Market Pulse,” an area of the site that aggregates feeds or discussions of a particular stock in real-time from StockTwits and Covestor. If you have never heard of StockTwits, just think of it as Twitter for the world of investing. Maybe a little less known is Covestor, a social network for investors that allows them to mirror transactions of other investors.
At first glance, I admit that I dismissed StockTwits as nonsensical ramblings by a bunch of “Twits” and Covestor as speculative herd mentality – but I decided to take a closer look.
Within a few seconds, I noticed that Dell recently created an official StockTwits page, for which they most likely paid the going rate of $250 dollars a month. Their page had around 45 posts and five followers through last month, and I began to wonder why Dell might have established the account in the first place.  My thoughts:

  1. Monitoring online conversations is an important component of reputation management. If you are not engaging with your investor constituencies online, you should at least be listening and ready to respond.

  2. As investor audiences increasingly move online, content should be distributed across multiple platforms simultaneously.

  3. Companies do not always need a press release or Web cast to communicate with shareholders.  Sometimes it is more efficient and cost effective to express yourself in 140 characters or less.

As social media platforms debut and real-time applications evolve, I suspect that in the New Year the investor relations community will have plenty of new services to consider.  While it is important to keep an open mind, one should understand their value and whether they are worth the time and money in the first place.


Matt Sheldon,

Why Football is Just Like Investor Relations

Photo Credit: Al Guel Photography on Flickr

As a huge fan of the game of football, I got to thinking recently about how similar things are in my daily life as an investor relations professional to Eli Manning’s life as the star quarterback for the New York Giants (shameless plug for my hometown team – Go Giants!).
In football and in investor relations strategy is key.  Eli Manning spends hours strategizing about the best way to win the next big game.  I spend hours strategizing about the best way for my clients to win positive attention from the investment community.
In football and in investor relations knowing the competition is paramount.  Eli scrutinizes his competition by watching clips, reading scouting reports and analyzing other teams’ histories to gain the upper hand.  I scrutinize clients’ peers by reading voraciously, examining financial statements and listening to chatter to make sure I understand industry dynamics, know the analysts who cover the space and recognize what propels investors to buy.
In football and in investor relations communications is vital.  On the field, Eli must talk to his players to relay plays, position his players correctly and make sure they are all on the same page.  Likewise, I must communicate with clients, investors and analysts to ensure we are all on the same page.
In football and in investor relations, you must play by the rules of the game.  There are hundreds of rules that govern the game of football.  Coaches, players and referees must follow them and embrace them.  There are also hundreds of rules that govern the practice of investor relations from the exchanges to the SEC to employing IR best practices.
In football and in investor relations, the eye is on the long-term prize.  For Eli, that prize is a Super Bowl ring.  For me, it’s helping clients grow and sustain shareholder value.
While watching me in action is surely less exciting than watching Eli fire the ball down the field, we may just be kindred spirits.


Laurie Berman,

A Matter of Balance

Fox News is No. 1.  Well, at least in ratings.  Rupert Murdoch’s news channel continues to lead all time slots among cable news stations followed by MSNBC and CNN, respectively.
Many news pundits see Fox as the Republican Party’s propaganda machine, just as MSNBC reports news and opinion from a liberal perspective.   This is not “new” news, however.  The 24-hour news cycle is filled with sensational punditry instead of hard facts.
What does Fox have that the other news networks don’t?  Roger Ailes for starters.   The Fox news chief made headlines this week when he called NPR executives “Nazis” during an interview with The Daily Beast.   Ailes ripped the network for firing news analyst Juan Williams after the seasoned conservative commentator made inflammatory remarks on Fox News about Muslims.
While Ailes later apologized to Jewish groups in a letter to the Anti-Defamation League, his comments made national headlines.  And it’s not just Fox News that’s generating press coverage for inflammatory content.   Fox Broadcasting Company, Fox News’ parent, aired an episode of “The Simpsons” Sunday that parodied the recent midterm elections.  The broadcast featured a Fox News interview segment favoring GOP candidate Krusty the Clown against a Democratic challenger.
Sunday’s episode also showed a Fox News helicopter with the tagline, “Not racist, But #1 With Racists.”  No doubt this is funny stuff.  That’s why “The Simpsons” has been on television for more than two decades.  Fox has taken such liberties before in poking fun at itself.  It remains unclear, however, whether this is a ploy to make news or just funny entertainment.
Either way, conflict and controversy are main drivers of news. That’s why Fox and MSNBC lead the cable ratings ahead of CNN with their opinion-based commentary.  The question is, should PR professionals continue to feed the beast?  Perhaps we should be spending more time cultivating substantive stories that encourage constructive discourse as opposed to sensational punditry.
Easier said than done.


George Medici,

IR in ‘I AM’

Last week, I attended a networking event hosted by Bank of America Merrill Lynch at the Paley Center for Media in Beverly Hills. The event included an exclusive screening of “I AM,” a documentary that recounts the story of filmmaker Tom Shadyac after a cycling accident left him with post-concussion syndrome. Though he recovered, he emerged a changed man.  Known for directing films such as, “Ace Venture: Pet Detective” and “The Nutty Professor,” Shadyac embarked on a journey to discover how he, as an individual, can improve his life, and what we, the audience, can do to make our lives better.


The film explored why today’s culture is so engulfed and obsessed with competition and separation, instead of community and cooperation. The film features interviews with well-known cultural figures such as Archbishop Desmond Tutu and the late historian Howard Zinn, as well as lesser-known scientists, poets and evolutionary biologists.
After watching “I AM,” it got me thinking about how Shadyac’s film can not only be applied to each of us on a personal level, but to the business realm as well.
The film is particularly relevant to our line of work because it reminds us how important it is to understand the communities we serve, particularly investor constituencies.   The more public companies and investors understand and communicate with each other, the more likely it will enhance long-term shareholder value.  And that’s something we can all appreciate in this environment.



Board Diversity in the News

Last week, SEC Commissioner Luis Aguilar said that women and minorities remain “woefully underrepresented” on corporate boards, despite numerous studies that show “diversity in the boardroom results in real value for both companies and shareholders.”
Despite the best of corporate intentions over many years, the SEC adopted a new rule, which began applying to proxy solicitations on February 28, requiring a company to disclose:

  • whether diversity is a factor in considering candidates for nomination to the board of directors;
  • how diversity is considered in that process; and
  • how the company assesses the effectiveness of its policy for considering diversity.

Recently, the SEC completed a review of the filings it received and found a broad spectrum of compliance with the rule.  Some companies have done a very good job, others have room for improvement, and still others provided only a brief statement indicating that diversity was something considered as part of an informal policy.
The SEC has now begun to act on the continuing lack of board diversity, and Commissioner Aguilar suggests that companies prepare disclosure with an eye toward it being useful to investors – especially since the rule was originally adopted at investors’ requests.  Specifically, he recommends that the disclosure indicate whether the company has a policy of:

  • interviewing one or more candidates who are a minority and/or a woman;
  • retaining a search firm that has been specifically instructed to seek candidates who are minorities and/or women; and/or
  • soliciting recommendations from organizations that have a reputation for identifying candidates with diverse backgrounds.

The SEC also recommends that the company indicate how many candidates were interviewed who were women and/or minorities and highlight the diversity of the existing board of directors.
Board diversity is an issue that has stimulated much discussion, but with not enough results.  Given its importance, it’s time for businesses to make board diversity a priority.



The Masquerade Call

Photo Credit: Mark Loveridge via Flickr

Likely prepping for Halloween last week, several quarterly earnings calls were usurped by a rogue analyst who masqueraded as yet another sell-side analyst in an effort to freely ask questions during the Q&A session.  Most of the companies targeted were in the consumer sector, and the questions generally surrounded each company’s e-commerce initiatives.  While I applauded the individual’s effort to conduct some primary research in a creative manner, his antics were disruptive and inappropriate.
It seems as though the individual pretended to be an analyst of higher repute, using a faux identity to gain access to management when queuing up for the Q&A session.  Even though he faithfully divulged his true identity when speaking with management, the immediate reaction by the management team was one of panic and apprehension about what the person was going to say.  Because these calls are in a public forum, allowing an unknown individual to have unfettered access to the podium mic could be dangerous.
Which brings me to the topic of managing Q&A sessions altogether.  Everyone knows about the myriad online tools available to manage the conference call Q&A session in real time.  Yes, the game is slightly rigged, but if all individuals who have a question or comment are allowed their time, these calls would last forever.  The cost for hosting a conference call is also expensive, and it is imperative to monitor managements’ time.  So let me warn you now, if you are a whacko or trouble-maker short, we have the means to keep you out of the party.
With last week’s antics, it might be due time for additional rigors in the system.  To avoid conference call interlopers, managements may consider creating two call-in numbers or two ID passcodes.  Assign one to Group A (perhaps a small group consisting of your sell-side analysts) and one to Group B (all others, often the buy-side community).  Coordinate with the conference call provider and instruct them as to which group is allowed to participate in the Q&A.
Of course, these are just examples and not necessarily the best practices for every company.  But I would rather try to unmask cloaked callers than completely pull the plug on this important quarterly ritual.  



A Good App is Hard to Find

After a few months with my new smartphone, I’ve come to the conclusion that these phones are much smarter than I … or is it me? Let me see if there’s an App for that.
There probably is, but I focused on personal finance Apps the second I picked up the phone because money takes priority over grammar.  I focused on the Android market because, well, I have an Android phone.  You iPhone fans will have to check back later to see if a colleague will blog about your tool.
I wasn’t interested in downloading every single financial App. Fortunately, a writer at already did the work for me, highlighting the five best Android Apps for personal finance.
My personal favorite in the Big 5? Goggle Finance. User friendly, easy to read, smooth interface and streamed stock quotes that automatically refresh.  Now I can watch my personal stocks tank from anywhere in the world in real-time.


Ron Neal,

Some Words Never Change

Photo Credit: Flickr, jessamyn

Remember those enticing print advertisements from stock brokerages (today called financial advisory firms) and mutual funds (still called mutual funds) in the mid-2000s, when the market was recovering from the dot-com bust and the world seemed better?
In case you haven’t noticed, the ads are back.
Who woulda thunk they’d return so soon in the Great Recession’s early wake?  And why on earth do the advertisers think their words of wisdom and comfort will entice new customers?  Hey, the world isn’t quite better yet, anyway.
Last weekend, as I caught up on some old-fashioned newspaper reading, I couldn’t help notice some of those ads.  Don’t laugh too hard, but without mentioning any names, see if you get comfort from, or believe the words in any of these beauts:

…we employ a thoroughness that inserts discipline into a potentially emotional situation.Discipline is a great idea.

…everything we do is unflinchingly client focused.Unflinchingly? Is that even a word?

…it’s time a financial advisor took into account your complete financial situation.I’ll say it’s time!

…getting you to your dreams requires a more personal approach.”  Whatever happened to sleeping pills?

…building a relationship makes the difference.What a notion!

…we offer vision.Ophthalmologists R Us.

…we offer our mutual funds at cost.” What cost is that?

…it’s no secret that accumulating wealth today is more difficult than ever.”  And I thought that was a secret!

…the ultimate goal of new money is to become old money.”  Better than lost money.

…the trick is to learn from the past without getting stuck in it.”  Sounds like an oil spill in the Gulf.

…when you pay less, you can keep more.”  And tell me, what does this have to do with investment returns?

…past performance cannot guarantee future results.” Let’s hope not!

…everything shapes the future of your investments.”  Everything?

…the truth is that the financial world has fundamentally changed.”  Good this firm is telling the truth.

…in these changing economic times, some things never change.” Amen.

Roger Pondel,

Crowdsourcing IR

There’s been a lot of media chatter of late about crowdsourcing, the act of outsourcing a particular task to a group of individuals, community, or crowd.   For example, in Beth Novek’s book, Wiki Government, she discusses her experience creating “Peer-to-Patent,” a crowdsourcing project that attempts to streamline the patent review process by outsourcing it to a crowd of experts.  This whole notion of crowdsourcing got me thinking whether investor relations could have some sort of crowdsourcing component.
The crowds, in this case, are shareholders.  The task:  to write a financial news release based on a company’s quarterly results.  Assuming shareholders have ideas about what they’d like to hear when a company reports its earnings or lack thereof, I’m curious what would happen if a company simply released a balance sheet and income statement to shareholders and then asked the group to assemble a financial news release.
Think of it the same way people create Wikipedia entries.  All of these supposed experts or shareholders would distill a document that (hopefully) reflects the most relevant information about a company’s financial condition.  But why stop at shareholders? How about getting a bunch of analysts to crowdsource a research note?
Perception studies are perhaps the closest IROs get to crowdsourcing.  Maybe instead of relying on our own ability to gauge what questions to ask and what information would be valuable to a management team, we should also come up with a method to crowdsource. Ultimately, it could foster more transparency and collaboration among public companies and their constituents.


— Evan Pondel,