Forum Home Page [see Broadridge note below]

 The Shareholder ForumTM`

Fair Investor Access

See related case examples of

Dell Inc.

appraisal rights for intrinsic value realization

and

Walgreen Co.

stock buyback policies

"Fair Access" Home Page

"Fair Access" Program Reference

For graphs of specific company and related industry returns, see

Returns on Corporate Capital

For graphs of specific company voting for the past 5 years, see

Shareholder Support Rankings

 

 

 

 

The survey report presented in the following slides (which are available for downloading in printable form here) is summarized in the article below and in a Brunswick Group press release. For the Forum survey that established what the new research shows to be continuing investor preferences for direct management sources of decision-making information, see the October 6, 2010 Forum Report: Survey of Investor Communication Priorities for Voting Decisions (also available in print form; 5 pages, 119 KB).

 

 

Source: IR Magazine | Inside Investor Relations, January 29, 2013 article

Inside Investor Relations

 

Social media fail to replace direct company contact

29 Jan 2013

Digital and social media make gains but direct company information remains most important

Social media are becoming increasingly important, according to new research, but have done little to tear investors away from their primary source of information: companies themselves.

There’s no doubt the investment community is embracing social media; more than 200,000 investors, market professionals and public companies now share information through StockTwits, according to the company, which was launched in 2008, and Twitter got its own trading platform earlier this month in the form of DCM Dealer.

 

In fact, investor interaction with digital and social media is increasing ‘substantially’, according to new research from the Brunswick Group. Of almost 500 investors and sell-side analysts in Europe, the US and Asia surveyed by Brunswick, more than half read blogs, a quarter use social networks and 30 percent now use Twitter – a 19 percentage point increase since the study was last conducted in 2010.

‘Use and engagement of digital and social media among those in the investment community is increasing rapidly,’ says Rachelle Spero, partner at Brunswick, in a company press release.

‘More telling, however, is that their influence on investment decisions continues to grow, too. Now, a quarter of those surveyed say they have made an investment decision or recommendation after initially reading a blog. For Twitter, that figure is one in eight, up considerably from our last survey two years ago. This suggests now is the time for companies to adopt digital and social media for investor-related content distribution and influencer engagement.’

Overall, digital reliance has doubled since 2010, says Brunswick, with the big push coming from Asia, where investors are more likely than counterparts in the US or Europe to take action based on digital information or to rely on a digital relationship with a company.

‘The intensive use of social media as an information channel in Asia is a surprise to me,’ says Patrick Kiss, investor relations expert and founder of the IR Club in Germany. He adds that the US ‘as creators of most of the social media tools’ is lagging behind.

Spero says this can be explained to some extent by demographics. ‘Asian populations tend to be much younger than the rapidly aging populations in the West. Our data shows investors surveyed in Asia as being a little younger than those in Europe or North America,’ she says, adding that the blocking of social media networks by some companies in the US ‘for a number of reasons including legal, regulatory, and security’ could also have an impact.

Almost a quarter of Asian investors and analysts say information posted on a micro-blogging site – such as Twitter – has led to an investment decision or recommendation, yet the same is true for only 4 percent in the US. A similar gap can be seen when it comes to social networks, though the gulf closes to 28 percent for Asia and 24 percent in the US when it comes to blogs.

While Brunswick reports that 86 percent of investors say online resources have become more important this year, it seems nothing can replace traditional sources. More than half (57 percent) still rank ‘information direct from the company’ as the biggest influence on their investing decisions, while 85 percent put it in their top three – an increase from 84 percent in 2010 and 73 percent in 2009. Unsurprisingly, access to senior management is the most important factor within this category. This compares with 14 percent who place ‘digital and social media’ in the top three most influential sources, up from 6 percent in 2010.

Kiss says it is no surprise investors want information direct from companies. ‘This was and always will be the best, unfiltered source,’ he explains. ‘But only institutional investors have the chance to meet the CEO in person. Social media could be tools for investor democracy, a direct way to inform 85 percent of private investors, too.’

With the clearly growing importance of social media, Kiss adds that changes in information dissemination can take time and a breakthrough could be on the cards. ‘In former times companies sent out faxes; nowadays they email information,’ he says. ‘Maybe in the future they’ll tweet.’

 


© Copyright Cross Border Ltd. 1995–2013. All rights reserved.

This Forum program is open, free of charge, to anyone concerned with investor interests in the development of marketplace standards for expanded access to information for securities valuation and shareholder voting decisions. As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

This Forum program was initiated to address issues and objectives defined by participants in the 2010 "E-Meetings" program relevant to broad public interests in marketplace practices, rather than investor decisions relating to only a single company. The Forum may therefore invite program support of several companies that can provide both expertise and examples of leadership relating to the issues being addressed.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to access@shareholderforum.com.

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.