Investor Relations and New Media:

An Investigative View of New Communications

John A. Greenlaw
Quinnipiac University
Part I - Issue
The current “synergy” era of the investor relations profession refers to the mixture of

financial knowledge and communication that are necessary to strategically translate company

information into meaningful messages, enable two-way communication with investors and the

financial community, and achieve a fair valuation of a company. Financial knowledge is

important, nut relatively unchanging in respect to how business and markets function; however

communication techniques are dynamic in the sense that over periods of time, new media outlets

emerge, interests change, and new audiences are formed. An aspect of investor relations

communication that is relevant and extremely impressionable today is new media. New media

cannot be defined as one specific form of media because, it is without doubt, that a newer form

of media will always surface. However, to view “new media” objectively, one can define the

term as “electronic interactive media.”1

Investor relations impressions are present on virtually all popular “new media” websites

and services on the internet. In particular, investor relations professionals have engaged in

investors and audiences through the use of social media sites and services, which grant these

professionals with the ability to have effective two-way symmetrical communication. Disclosure

services are also used to investor relations departments such as RSS feeds (real simple

syndication) which allows investor relations departments to release information to investors and

investors to subscribe to these media feeds. Nonetheless, because of new media, investors are

able to go onto the internet, post a question/concern regarding a company, receive feedback from

a respective IR department, attain crucial company disclosures, and have the satisfaction of

1
New media definition. (n.d.). BusinessDictionary.com - Online Business Dictionary. Retrieved March 10, 2010,
from http://www.businessdictionary.com/definition/new-media.html
knowing that IR departments are taking part in new media to communicate with anyone who

desires information.

There are, however, some issues regarding new and social media that investor relations

professionals must consider when engaging in such mediums. The issues that must be

considered are legal disclosure, efficiently using new media, and the security of new media.

Part II – Dominating Opinions

Investor relations professionals have utilized new media to encourage two-way

communication to engage in discourse with investors, financial audiences, and other investor

relations professionals are Twitter, Facebook, and web-based journals also known as “blogs.” In

fact, even the Securities and Exchange Commission recognized published company blog posts as

official public disclosures in 2008.2 As a result, every major corporation has a blog in which it

communicates with its public. A topic that was investigated was whether or not investors were

comfortable communicating with companies on blog sites and forums in which the company

controlled. A prime example of this is the “Dell Hell” case study3 in which customers and

investors posted negative comments on the Dell official blog and were not resolved. “Dell Hell”

became a viral blog for irate customers and investors in which Dell had no control over.

Learning from this example, companies seek high traffic blogs and new media sites to make

proactive attempts to satisfy investors with information, two-way communication, and web based

services. Doing this deters the potential threat of uncontrollable investor uproar via new media

that the company has zero-control over.

2
Solis, B. (2008, July 31). SEC To Recognize Corporate Blogs as Public Disclosure. Can We Now Kill the Press
Release? . TechCrunch . Retrieved March 10, 2010, from http://techcrunch.com/2008/07/31/sec-to-recognize-
corporate-blogs-as-public-disclosure-can-we-now-kill-the-press-release/
3
Dell Hell – A Social Media Learning. (n.d.). Upload & Share PowerPoint presentations and documents. Retrieved
March 10, 2010, from http://www.slideshare.net/chaturvedibraj/dell-hell-a-social-media-learning
 Problems regarding investor relations and new media would be the lack of security many

third-party websites offer to subscribers. Because investor relations professionals are required

by law to comply with securities legislation and provide accurate and relevant information to

achieve fair valuation of stock and company worth, unsecure platforms for company disclosures

must be evaluated. In particular, Twitter is a social media site that has been known for its faulty

security and hacked accounts. If social media sites, such as Twitter, have compromised security,

information that investors disclose to the public could be falsified which would challenge the

ultimate goal of investor relations as a profession: to achieve fair valuation of the company.

There have been several examples of instances where Twitter accounts have been hacked, both

externally and internally. Examples such as Vodaphone‟s, emphasize security within company

walls when an employee breached the company‟s official Twitter and risked company reputation

by posting explicit messages.4 Investor relations professionals should consider the risks of

disclosing information on social media sites because of the ease of security bypass. Investor

relations professionals and opinion leaders, such as Dominic Jones of IRWebReport.com5

suggest that Twitter may be secure enough, but on the other hand, perhaps nothing is one-

hundred percent secure on the internet.6 The security dilemma Twitter presents is extremely

worrisome when companies use Twitter as an automotive stock update service.

4
"Vodafone suspends employee over obscene Twitter update." Telegraph.uk. 2 Feb. 2010. 10 Mar. 2010.
<http://www.telegraph.co.uk/technology/twitter/7168310/Vodafone-suspends-employee-over-obscene-Twitter-
update.html>.
5
Dominic Jones | IR Web Report. (n.d.). IR Web Report: | Investor Relations Web Best Practices, Trends and News.
Retrieved March 11, 2010, from http://www.irwebreport.com/about-us/dominic-jones/
6
Is Twitter secure enough for investor relations? | IR Web Report. (n.d.). IR Web Report: | Investor Relations Web
Best Practices, Trends and News. Retrieved March 10, 2010, from http://www.irwebreport.com/daily/2010/02/26/is-
twitter-secure-enough-for-investor-relations/
 One particular discussion that dominates investor relations‟ discourse online is the

opinion that investor relations professionals do not use social and new media to the full potential.

Investor relations professionals realize the benefits of using social media.

„“The risk posed by social media for your company … exists whether you participate or

not,‟ observed Darrell Heaps, CEO of Q4 Web Systems, an IR website and

communications firm out of Toronto. „If you‟ve ignored social media and said there are

too many risks, we„re not going to get involved, then you are putting your company at

higher risk … than if you know how to use the tools. The market doesn‟t care whether or

not you‟re there. They‟re going to use the channels that are most readily available to them

to put their message out.”7

This synergy era of investor relations poses many challenges for professionals to better reach

their audiences, but also provides professionals with tools for easy communication. Based on

online discussion, it is absolutely necessary for IR departments to become involved in new and

social media and develop web strategies for investor communication. Social media sites, such as

Facebook, drive more traffic to other websites than Google8, which is evidence in itself that the

audience exists in social and new media realms. Companies must now take full advantage of

having a large concentration of audience and craft messages to promote symmetrical two-way

communication. This includes using tools such as RSS feeds, podcasts, blogs, forums, and

webinars to create relations with investors.

Part III – Opinion and Future Outlook

7
Investor Relations in the Age of Social Media « Mesh Media Strategies. (2009, October 9). Mesh Media Strategies.
Retrieved March 11, 2010, from http://meshmediastrategies.com/2009/10/09/investor-relations-in-the-age-of-social-
media/
8
Ries, T. (2010, February 10). Facebook Drives 350x More Traffic to News/Media Sites than Google Reader «
Social Media at Work. Social Media at Work. Retrieved March 9, 2010, from
http://socialmediaatwork.com/2010/02/06/facebook-drives-far-more-traffic-to-newsmedia-sites-than-google-reader/
 Based on observation and reading online articles and discussion forums, there is no doubt

that investor relations benefits exponentially from social and new media. As the hockey legend,

Wayne Gretzky, once said, “You miss 100 percent of the shots you don‟t take.” Social and new

media are “shots” investor relations departments are given to reach large audiences in once

place. If companies choose to not participate, they are missing a huge communication

opportunity What makes social and new media even better is the fact that people are inclined to

participate honestly in discussions which allows companies to achieve two-way communication

with their audience.

Investor relations has evolved tremendously from the last five years based on the new

media tools that are available, such as RSS, blogs, podcasts, webinars, etc. Compliance with

Securities Exchange Acts have been made much easier through the increased dissemination of

information and investor materials throughout new and social media sites. Compliance seems to

be much easier when information is disclosed; however, because dissemination is so easy, the

challenge lies in keeping information that is non-public to remain non-public. This is the job of

investor relations departments to act as the media gatekeepers to release public material and hold

back the undisclosed from new media.

There is no doubt that new forms of media will emerge in the future. Some new form of

communication is always under development. It is an outward looking conjecture to say that the

investor relations profession will always embrace new and social media to communicate with

respective publics. The only difference between now and the future is how the professional will

adapt to future new media. Investor relations will always use social and new media to

strategically integrate finance, communication, marketing and securities law compliance to better

communicate with investors and the financial community in order to achieve fair valuation of a
company. Social and new media are still very new tools in the world of communication. There is

still much potential for investor relations departments to use new media more efficiently. Social

and new media are also constantly evolving with creates the challenge for IR departments to

constantly adapt to new forms of communication and use them more and more efficiently.

Regardless, investor relations as a profession will always use social and new media. The

question is: how will investor relations use social and new media in the future and what new

forms will emerge?

Dell Hell – A Social Media Learning. (n.d.). Upload & Share PowerPoint presentations and
documents. Retrieved March 10, 2010, from http://www.slideshare.net/chaturvedibraj/dell-hell-
a-social-media-learning
Dominic Jones | IR Web Report. (n.d.). IR Web Report: | Investor Relations Web Best Practices,
Trends and News. Retrieved March 11, 2010, from http://www.irwebreport.com/about-
us/dominic-jones/

Investor Relations in the Age of Social Media « Mesh Media Strategies. (2009, October 9). Mesh
Media Strategies. Retrieved March 11, 2010, from
http://meshmediastrategies.com/2009/10/09/investor-relations-in-the-age-of-social-media/

Is Twitter secure enough for investor relations? | IR Web Report. (n.d.). IR Web Report: |
Investor Relations Web Best Practices, Trends and News. Retrieved March 10, 2010, from
http://www.irwebreport.com/daily/2010/02/26/is-twitter-secure-enough-for-investor-relations/

New media definition. (n.d.). BusinessDictionary.com - Online Business Dictionary. Retrieved

March 10, 2010, from http://www.businessdictionary.com/definition/new-media.html

Ries, T. (2010, February 10). Facebook Drives 350x More Traffic to News/Media Sites than
Google Reader « Social Media at Work. Social Media at Work. Retrieved March 9, 2010, from
http://socialmediaatwork

Solis, B. (2008, July 31). SEC To Recognize Corporate Blogs as Public Disclosure. Can We
Now Kill the Press Release? . TechCrunch . Retrieved March 10, 2010, from
http://techcrunch.com/2008/07/31/sec-to-recognize-corporate-blogs-as-public-disclosure-can-
we-now-kill-the-press-release/

"Vodafone suspends employee over obscene Twitter update." Telegraph.uk. 2 Feb. 2010. 10
Mar. 2010. <http://www.telegraph.co.uk/technology/twitter/7168310/Vodafone-suspends-
employee-over-obscene-Twitter-update.html>.