Those of you with long memories will remember the buzz around social media in April 2013 when the SEC said companies could use channels such as Twitter (now X) and Facebook for disclosure, as long as they let investors know in advance.
Of course, companies didn’t take up the offer of using social media as the sole method to release material information – not even the most edgy tech companies thought that was a good idea.
But it did kick off a big debate about the role of social media in investor relations, which continues to this day. IR teams still ponder whether their valuable time and resources should be allocated to social media and, if so, which channels.
Ten years ago, the conversation was all about Twitter, Facebook and niche networks like StockTwits. Increasingly, however, the social destination of choice for IR teams is becoming LinkedIn.
Two weeks ago, SAP launched its own IR LinkedIn channel, following in the footsteps of fellow German issuers Fresenius and DHL. Right now, very few IR departments have taken this step but it’s indicative of how much more seriously companies are taking the professional network as a place to share investor-focused information.
During earnings season, you’ll see many companies posting sharply written updates about their results, often accompanied by slides, images and video. They are also using the platform to keep stakeholders informed about their sustainability progress and ESG targets. Consultancies today offer IR teams bespoke services to help them boost their corporate profile on the site.
LinkedIn’s appeal stems from a variety of factors. It has grown hugely over the years and now counts around 1 bn users. It benefits from having registered users who post in a personal capacity, meaning (most of the time) you know who you are talking to and conversation remains civil.
It’s also a diverse audience – everyone is there, from investors to employees and customers – so communications can have a wide impact. What’s more, posts often lead to connections, which can open the door to new buy-side or sell-side relationships.
Another driving factor is the desire to connect with the next generation of investors, which, according to surveys, often take cues from social media. For example, a 2022 study of US investors by the FINRA Investor Education Foundation found 60 percent of 18-34 year olds use social networks to source investment information, compared to 35 percent of 35-54 year olds.
The debate about IR and social media will rumble on. But, for IR departments looking to expand their digital outreach, LinkedIn is arguably now the channel of choice.