1. Preparing tweets in advance of the call.
2. Providing a link to the materials associated with the live event.
3. Proactively soliciting questions in advance.
4. Consistent use of #hashtags.
5. Appending tweets with your ticker symbol.

As I mentioned last week, I thought a separate post on disclaimers was warranted.  So this post is dedicated to some specific examples from our research on how companies are using disclaimers for live-tweeting events.

We’ve been conducting our research on how public companies are using social media for investor relations for the past few years now. So we’ve had quite a few discussions with IROs and IR professionals. More often than not, the conversation begins with questions about the compliance issues and potential risk of violating Reg FD using social media to share investor information.

We’ve also had many conversations with legal representatives such as Caroline Clapham who have taken the time to share their thoughts and insights on the topic of social media for investor relations.  Caroline is a securities and M&A lawyer at Fasken Martineau in Vancouver, Canada.  I met Caroline on Twitter earlier this year after reading an article she wrote for her firm on how companies can use social media and maintain compliance with Canadian securities laws. Since then, we have stayed in contact.

Caroline feels that the best practice is to have a general disclaimer in a company’s Twitter profile (usually by link), and then include shortened links within tweets that require disclaimer language, whether triggered by National Instrument 43-101 or by the inclusion of forward-looking information in the tweet itself.

Caroline said:

because tweets can be searched and located as stand-alone statements, the conservative approach is to include appropriate disclaimers embedded by link in each tweet. This minimizes the risk that an investor or potential investor might come across an individual tweet and rely on it as a hard fact.

To-date, I haven’t seen anyone use disclaimers as outlined above, but in my opinion this is a logical approach.

Now for some examples of how companies are using disclaimers to live-tweet their earnings call, annual shareholders meeting and analyst/investor day on Twitter….please note that we are not saying one way or another that any of the following examples we provide are right or wrong.  Instead, as usual, we are merely sharing some observations from our research on this front to inform the IR community.

Earnings Call

In our research, we are seeing companies provide a link to their FLS before they begin tweeting their earnings call and then one more time when the event is over.  For example, before Polycom begins live-tweeting their earnings, they issue a tweet (like the one below) that links to forward-looking statements:

Once they are done live-tweeting the earnings call, they finish off the sequence of tweets reiterating where their forward-looking statements can be found:

Companies are also using StockTwits to provide real-time earnings news. In addition to appending their tweets with their $TICKER tag and #hashtags unique to their earnings announcement,  companies often use a disclaimer at the start of the session for compliance, comprising of a Safe Harbor and non-GAAP Financial Measures Statement.  For example, like the LivePerson message below:

Annual Meetings

Johnson and Johnson also incorporate disclaimers for live-tweeting their annual meeting.  After an initial tweet that provides a link to the annual meeting webcast details: http://twitter.com/#!/JNJComm/status/63603179081834496,
as they discuss their first quarter earnings at the annual meeting, they provide a link to the forward-looking statements in their quarterly earnings release:

Analyst/Investor Days

More companies are also tweeting about meetings with analysts and institutional investors. For example, Exxon Mobil invited followers to listen in to their analyst meeting being held at the New York Stock Exchange:

The url provided in the above tweet: http://bit.ly/hjeaZV links to the webcast notice, presentation and forward-looking statements that all reside on the company’s website:

In addition to live-tweeting, I thought it would be useful to provide some other examples of how companies are using disclaimers on Twitter.

As we know, Twitter is limited to 140 characters, so we are seeing companies include a shortened disclaimer which links back to the full disclaimer (which is housed on their website). For example, Zimtu Capital Corp. provides a ‘Terms of Use’ link in their bio which links to their website:

As you can see, they prominently display the link to their disclaimer in their company bio at the top of their Twitter profile.  Doing so, helps make it easy for followers to see the link and subsequently read the terms.

Potash Corp. also provides a disclaimer on their Twitter profile page.  Although instead of linking to it on their website, they have written out the entire disclaimer as it relates to their tweets on the left-hand side of their Twitter profile:

Note: you can see the disclaimer in its entirety by viewing their @potashcorp account on Twitter.

I’d love to hear of any other examples of how disclaimers are being used by public companies on Twitter. Please let me know in the comments section.

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One of the concerns highlighted by the attorneys was how Twitter’s 140-character limit inhibits a user’s ability to archive information or delete material that is out-of-date.

This is a valid concern for companies that are using Twitter for investor relations – particularly the increasing number who are live-tweeting their earnings call. You can read about specific examples by clicking here.

The attorneys didn’t point to any resources that addressed the archiving issue.  I was also unaware at the time the blog was written, of any resources that directly addressed the companies to archive their tweets.

However, I recently read an article by Lauren Dugen: ‘How to Archive your Tweets’. As more IROs are investigating and implementing social media for investor relations, I thought it would be useful to share the ideas in Lauren’s post.  Please note that I provide some of her commentary verbatim (which is indented in the body of the post).  Anything not indented is my two cents.

Lauren begins by referring to three ways to view your old tweets. I’m glad she points this out, as sometimes I need to go back and see what I’ve tweeted.   The first two ways to view old tweets are 1) Snap Bird (which allows users to look at old tweets 220 tweets at a time) and 2) TwimeMachine (which pulls older tweets into a single web page, starting with the most recent).

The third way to view your old tweets and easily archive them is in a TiddlyWiki format, which is created by TweetScan.

TweetScan is a free service that will archive your tweets, without requiring any coding knowledge or additional downloads.

TweetScan lets you backup your tweets, compiling your last 1,000 tweets into its archives. You can also choose to archive direct messages, favorite tweets, @replies and more.

Because it can only find your latest 1,000 tweets, it’s a good idea to start using TweetScan early, and update it once a month or so to ensure that it captures as many of your tweets as possible. Once you use it to backup your tweets, you will be able to view them, add notes and comments, and edit them in the TiddlyWiki format. You can even access them offline.

We speak with IROs on a regular basis and the conversations regarding using social media for investor relations are shifting from ‘I don’t have time to do this’, to ‘how do I get started?’  Although Reg FD is still in the top three concerns especially for a company’s in-house legal counsel.

Proactively testing out channels such as Twitter and showing your management team and legal counsel how your peers are effectively using Twitter will help make the business case to use it for investor relations.

The fact that there is now an effective way to archive tweets will also help you address compliance concerns.

I’d be interested to hear if anyone has used TweetScan?  What about other resources to archive tweets?  Let me know!

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On June 21, Lou Thompson who is a recognized expert in corporate disclosure, governance and communications and served as President and CEO of NIRI for nearly 25 years before he retired from the organization in 2006, wrote an article for Compliance Week: ‘Navigating Reg FD in a Hyper-Connected World’.

I thought the article was timely as it discusses some of the ideas brought forth in the Lunch ‘n ‘ Learn and reiterates some key points (that have been discussed in the IR community but nonetheless merit repeating) that IROs should consider before using social media for investor relations.

For example, the author doesn’t discourage using social media for investor relations but suggests that before IROs get their feet wet, they should monitor what others (particularly marketing and marketing communications) are doing with social media.

IROs can gain a lot of intelligence from other departments that are using social media to communicate and engage with stakeholders. In particular, they can see how questions can be handled i.e. directing specific questions to the appropriate department. In the case of investor-related questions, a contact name and email address will take the conversation out of the ‘public’ forum.

The author also underscores the importance of developing a sound social media policy and offers the following tips to help companies mitigate regulatory and compliance risk when using these tools to increase shareholder and customer engagement:

1. Adopt a comprehensive and integrated social media policy and guidelines for using social media.
2. Proceed with extreme prudence. Deloitte, in its Enterprise 2.0 Harnessing Social Media, warns companies that the need for caution is clear in executing a well-planned social media strategy given that you have little or no control over content once transmitted through the social media.
3. Create a working group under the chief compliance officer or the general counsel (in companies without a CCO) consisting of representatives of marketing, marketing communications, investor relations, corporate communications, human relations, and any other function using the social media to connect with their respective audiences. This working group would assess regulatory and compliance risks in using social media and develop an integrated social media policy to eliminate or mitigate potential risks.
4. On an on-going basis, the working group would monitor the company’s use of social media to identify potential regulatory violations.

I really like the idea of creating a working group with the key departments – as it gives each group a voice and a sense of accountability in adhering to the guidelines in the policy. Also having regular meetings to discuss the document will help ensure the policy remains relevant and evolves accordingly to keep up with the ever-changing regulatory environment.

As the author states, there has been little regulatory guidance for companies to go by when it comes to using social media for investor relations. Until then, companies should monitor and ‘establish policies that take advantage of social media as a means for enhanced communication’.

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As it is earnings season there was a very low turnout.  In spite of this, I had a good conversation with @trevorheisler. Thanks also goes out to @fredmcclimans for joining us near the end.

Q1: ‘Is anyone surprised at Microsoft’s move to website disclosure?’

@trevorheisler: ‘Not really. Sure other mega caps will follow.’
@q4websystems: ‘Do u think smaller co’s will still think it’s not for them?’
@trevorheisler: ‘For the most part, yes. They don’t have the same level of awareness in the markets or online.’

@q4websystems: ‘Agree. But what about multipronged approach as suggested by marketwire: http://bit.ly/c4Hvjh?’
@q4websystems: ‘I agree smaller co’s don’t have much awareness in mkt, but dissem. releases over newswires is costly.’
@trevorheisler: ‘I agree that a multi-pronged approach is the way to go for smaller companies needing to generate awareness.’

@q4websystems: ‘Smaller co’s may think it will stymie the reach of their news & Newswires argue won’t get sent 2 Bloomberg, DJ.’
@q4websytems: ‘Investment portals get notified once co files their release with edgar, so argument re: not reaching key media IMO is moot.’
@trevorheisler: ‘Agreed, newswire dissemination can be expensive, but there are ways to minimize that cost.’
@trevorheisler: ‘Companies that include financial statements could save newswire costs by just linking to financials on website.’

@q4websystems: ‘@irwebreport has made a good point here: http://bit.ly/avqaIC re: providing earnings releases in mult. formats and….’
@q4websystems: ‘Using social media 2 increase awareness by posting release & earnings pres on Slideshare (which sld also b posted on IR website).’
@trevorheisler: ‘Don’t forget the IR blog.’
@q4websystems: ‘yes! I liked your recent take on the merits to start an IR blog: http://post.ly/17fHs.’
@q4websystems: ‘Many good examples of co’s using IR blog to provide colour around earnings.’
@fredmcclimans: ‘Question on the IR blog: at what point do you have too many sources of information (diff 2 coordinate)?’
@q4websystems: ‘Hi Fred! I would limit to either CEO or IRO comment. If q’s come in re: product, designate 1 person.’
@q4websystems: ‘I also feel that earnings releases r cookie cutter & providing commentary on IR blog can help to clarify invest, prop.’
@fredmcclimans: ‘Agree – see the value. Thinking that a controlled “few” sources of into plug a wide #SM funnel would work very well.’
@q4websystems: ‘Precisely. Linking to various social media portals essential.’

Q2: ‘Anyone else think the resignation of office depot chairman & CEO too coincidental?

Q2: ‘Interesting article from Harvard law school: ‘The perils of implied messages and RegFD” http://bit.ly/9YCg23.’

Q2: “This just tweeted…timely to #irchat: RT @footnoted: Hefty payout for Office Depot’s departing CEO? http://bit.ly/d0WaDh.’

As you can see, not a lot of discussion was generated around the second question…I would recommend reading the two articles cited above – very interesting!

Don’t forget to join us every Thursday @ 11:00 a.m. EST. In the meantime, if you have any questions you’d like to submit for an upcoming #irchat, DM @meetthestreet or @q4websystems.

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Each week, we tackle three-four questions that address IR-related issues, trends and to generally exchange ideas. The session has garnered quite the following and has become a popular hashtag on Twitter.

Recently, @IR_practice one of the regulars and a great IR resource in general put out an open call to #irchat asking if anyone could share a link on best practices for organizing an investor day.  With experience as both an in-house IRO and IR consultant, I began to look through my files to see if I had anything to offer.  I also put in a few requests to friends and ex-colleagues in the IR profession and was surprised that no one had anything written down.

So in an effort to generate some concrete best practices, I posed this question on #irchat this week.  The question generated a lot of great ideas so I thought it would be useful to compile the output (all I have to say is thank goodness for whatthehashtag).  If you have something to add, please do – as it’ll help all IROs and IR professionals around the globe.

I have gone through the transcript and have broken the conversation down into key areas:

Making the Decision

There are many reasons to host an investor day.  It can be as simple as providing a general corporate update to providing details around a recent event such as an FDA approval or a merger or acquisition.  To be simplistic they can help get the broader story out.  They can also help investors get familiar with the management team (and help them gain confidence in them). Similarly, they can give the management team the opportunity to gain experience speaking in front of investors.

Sometimes, companies may also combine an investor day in conjunction with an industry meeting which is a good time to do so as some key investors may be in town already.

Time of year, Location and Time of Day

The consensus on the best time to host an investor day was to avoid earnings season.  Investors typically cover more than one company so they will have more than company they are following reporting at the same time and will be busy putting out their reports.  Further, an investor day should be held when you have something new to share and if you just reported earnings, it is likely that you won’t have much more to say to them for the time being.

Once you decide when you are going to have your investor day, careful thought should be put into the location.  You should consider where the majority of your investors reside and have it in a location that is central and easily accessible.

In addition to location, the time is also crucial and it was determined that the best day to have an investor event is a Tuesday, Wednesday or Thursday in the morning or lunch time, with breakfast or lunch served.  Although an interesting point was made in support of having the event on a Friday: there may be incentive for an investor to go (especially if it is out of town) as they could make a weekend out of the trip.

Company Participants

Hosting an investor day can give a company the opportunity to provide access to other members of the management team. For example, having senior managers talk about their division will help generate a better understanding of the business.  It can also help the managers get first exposure to the capital markets.  In general, think about your sector and who internally could help investors gain a better understanding of your business.

In addition to internal members of the company, consider a presentation by an industry expert such as an analyst or economist who can provide a macro perspective.

Preparation

Adequately preparing the team is essential particularly for those who have never or are not exposed to this audience that often.  So a conversation about Reg FD is critical.  Also doing a dry-run of the presentation and having a mock Q&A will help everyone get comfortable and trained in what can/cannot be said.

At this stage of planning, you should post the information on your website.  A great suggestion was made to have a dedicated landing page that will go live on the day of the event.  You should provide where the event is being held and also provide bios of who will be speaking – especially if you decide to have external guest speakers.

You can also broaden your audience by webcasting and recording the presentation. Applied Materials ($AMAT) was referenced as an example of a good investor day as they did a video webcast from New York.  So you should also let visitors know it will be webcast and that a presentation will be made available after the event is over.

You may also consider an interactive discussion whereby investors can call in and ask live questions.  So you will have to consult a webcast service provider to help with the logistics. Note: video webcasts can be costly, so if it’s not in your budget, bare minimum is to webcast and record.  There is great value in doing this, as you can post the links on your website, embed them on SlideShare, YouTube or Vimeo so they can be easily shared by others.

Once you get the website details set up, you should also determine what materials will be made available to participants.  Someone made the point that attendees are leaving their laptops at home and instead using their smartphones.  So if you are using powerpoint, having a printed color copy with three slides to a page with lines to make notes (handout version) will allow them to jot stuff done if they want.

Also more companies have adopted social media so if you use Twitter you should consider live-tweeting the event.  If you do live-tweet, send out a couple of tweets a few days before the event, announcing the details as well as the hashtag that you’ll be using.  Hashtags enable people to follow a conversation about a certain topic in real-time.  Their increased popularity on Twitter has also led to a number of services (like whatthehashtag) which compiles a particular hashtag feed and archives it, so anyone can read the transcript at a later time.

Showtime

You should arrive early the day of the event – you want to ensure that any equipment such as projectors, screen etc. have been set up.  You may also want to do a quick spin through of the presentation to ensure it loads correctly and test the webcast feed to minimize any potential technical difficulties during the event.

If you are live-tweeting the event, you should remind attendees of the hashtag and of your twitter handle or of the person doing the live-tweets.  You should also encourage questions to come over the channel and reiterate that they must include the designated hashtag to ensure it is seen and can be addressed. Lastly, you may also want to set up a separate screen with a laptop so everyone can see the tweetstreeam.

In order to prepare for follow up, it is a good idea to have a table where attendees can sign in.  Someone should be sitting there to greet the arrivals, direct them to sign in and collect business cards.

The IRO should be the host and do the welcome and introductions of the panel.  This helps the IRO gain some visibility as it is more than likely that they have never met any of these investors in person before.

During the introductions, the IRO should establish whether questions will be taken during or left until the end.  In my experience I have seen it done both ways, but IMO I think it is more effective left until the end especially if there are several speakers.

During the Q&A it is always a good idea to get people to use a microphone and have the panel repeat the questions as you want to ensure it can be heard over the webcast.

After the main Q&A is over, sometimes attendees linger around to ask management questions. This is a good opportunity for the IRO to get introduced and let them know they can be contacted directly for any follow up.  It is also good for the IRO to put their face to their name as it will make it easier to contact the investor in the future.

Also if a tough question is being asked of management, by being there, the IRO can ensure that nothing is being disclosed that shouldn’t be.  They can also make a note of the question as it may reveal an issue that should be addressed in the company’s messaging. It should also be noted if an investor wants a softcopy of the presentation sent to them or want a follow up meeting with management.

A Few Things to Ponder

There are a couple of ideas that were touched on during the discussion that I tried to weave into the categories, but I wanted to highlight them to gauge your feedback:

Giveaways

An example was given of a telephone company who offered participants at their investor day good deals on their products/services.   This could be a good way to enable investors to experience your business first hand. By doing so, they can intelligently provide feedback and ask informed questions.

Of note, this company is located in Europe so this may be an acceptable practice there.  I have been to investor days where companies have provided food samples etc.

What are your thoughts on giveaways? Is giving away a service like the phone company or a product acceptable?

Archive

How long should a company archive an investor day on their website? Three months?  Six months?  A year?  Further, if your company has more than one investor day during the year, should all of the archives be kept or should the first one be replaced with the most recent?

I look forward to your feedback!

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Google intends to make future announcements regarding its financial performance exclusively through its investor relations website.

Google is able to do this based on the SEC guidance from Aug 2008 regarding the use of websites for disclosure. This guidance states that under certain circumstances, companies can rely on their websites and blogs to meet public disclosure requirements under Reg FD.

As we all remember all too well, shortly after this regulatory change the market collapsed and this new channel quickly faded into the background, while most companies fought to survive the worst recession many of us have ever seen.

However, with 2009 behind us and the recovery underway, the first quarter of 2010 has seen the most activity on the web disclosure front yet, with a number of companies testing out new tactics. Let’s take a look at some examples.

BGC Partners (Nasdaq: BGCP)

BGC Partners, Inc. (BGCP 6.51, 0.00, 0.00%) , a leading global intermediary to the wholesale financial markets, today announced that it plans to issue an advisory release after the close of market on Wednesday, May 5, 2010, notifying the public that a complete and full-text financial results press release has become accessible at the “Investor Relations” section of http://www.bgcpartners.com.

Expedia (Nasdaq:EXPE)

Expedia, Inc. (Nasdaq: EXPE) today announced fourth quarter and full year 2009 results through a press release that is available now at http://www.expediainc.com/ir.

From Q4 Earnings Call – Seeking Alpha Transcript “You may also have noticed we have changed the way we are distributing our earnings release. Rather than put the release out over the newswire, we are pointing people to our IR site where they can pull down the PDF version. You should expect us to continue this practice going forward.”

Google (Nasdaq:GOOG)

MOUNTAIN VIEW, CA–(Marketwire – April 15, 2010) -   Google Inc. (NASDAQ: GOOG) has released its first quarter 2010 financial results. Please visit Google’s investor relations website at http://investor.google.com to view the earnings release. Google intends to make future announcements regarding its financial performance exclusively through its investor relations website.

Marathon Oil (NYSE: MRO)

HOUSTON, April 6, 2010 – Marathon Oil Corporation (NYSE: MRO) announced that the Company will begin issuing advisory news releases notifying investors and other interested parties when new and material information is available on its website, in compliance with the U.S. Securities and Exchange Commission’s guidance regarding “notice-and-access” news releases. With this change the issuance of full-text financial news releases via a wire service will be discontinued.

Reis (Nasdaq: REIS)

Reis, Inc. (Nasdaq:REIS), a leading provider of commercial real estate market information and analytical tools, announced that it plans to issue an advisory release before the opening of The Nasdaq Stock Market on Monday, March 15, 2010, notifying the public that a complete and full-text financial results press release has become accessible at the Investor Relations portion of Reis’s website (http://www.reis.com).

Tellabs (Nasdaq: TLAB)

NAPERVILLE, Ill., Jan. 26 /PRNewswire-FirstCall/ — Tellabs is announcing its fourth-quarter and year-end 2009 results and new quarterly dividend. A complete version of the news release is available at http://www.tellabs.com/news/2010/4q09.pdf.

We are certainly still in the early stages of web disclosure, however it is interesting to note that only Google has announced the intention to use its website exclusively and to no longer use advisory releases (aka “notice and access” press releases) . For the rest, each has moved to a shorter release with a link to their IR website for the details.

As expected we have heard from both sides of this debate, pro web disclosure and pro wire disclosure. Here are two of the popular posts:

Google moves to web disclosure for Reg. FD
http://www.irwebreport.com/daily/2010/04/16/google-moves-to-web-disclosure-for-reg-fd/

Is Google’s Latest Move Evil?
http://www.fool.com/investing/high-growth/2010/04/19/is-googles-latest-move-evil.aspx

In addition to the above posts I’ve been a part of two great discussions on the topic on LinkedIn. Both in the NIRI group (you have to be a member of NIRI to view) and also in the IR 2.0 group.  Each provides a good balance of opinion on the pros and cons of web disclosure.

In general, I think that only large companies with a significant following are a good fit for web disclosure. Companies like Google and other well known brands, have the ability to use their websites as a recognized channel of disclosure and can instruct the market to use their site and all available alert options (email, RSS, social) to keep abreast of news.

For most companies, either continuing to use a full-text press release alongside with posting it on their website or using an advisory/notice and access release are the two remaining options.

I am not against using press releases. In fact here at Q4, we use press releases when announcing big news.  I can easily say it is not a silver bullet, but used in conjunction with web and social channels, press releases can help increase awareness about your company.

Having said that, I think that the hybrid approach of continuing to use the wire to publish advisory releases that link to the IR website for detail(s) is where the market is headed.  The examples previously mentioned are an early indication that this approach may be the one most widely adopted going forward.

Using advisory releases gives companies the additional reach that a newswire can offer, while keeping costs down, and directing investors to the website for the details.  Linking to the website provides many search engine benefits for the company and gives them an opportunity to build direct relationships through subscription options like email, RSS and social channels.

It’s important to note, if you are going to direct investors to your site, you need to make sure it is ready for them.  IR website best practices, enterprise level hosting and accessibility + mobile access are all important areas to focus on to ensure that you can leverage the increased traffic to your site.

The benefits of using your IR website in this matter include:

• Improved disclosure & transparency – linking to your website allows you to share Excel files and formatted documents, which give investors more context and downloadable assets than reading the news on a third-party website.
• Improved efficiency –  putting the full-text release on the website allows you to manage only one version of the release and related financial tables , no longer will you have to juggle multiple versions with the newswire
• Increased investor traffic – linking to your website as a recognized disclosure channel will increase the number of investors to your website and allow you to provide more context  around your business
• Increased direct subscriptions and followers - with more investors visiting the website, there is an increased opportunity for them to register for email alerts, RSS and social updates –allowing you to build relationships directly.
• Reduced costs over time – moving to advisory releases reduces costs simply because these releases are shorter and commercial wires charge by the word.

We’re going to keep track of this trend and will report back in Q2.  If you know of other companies using these tactics, please include in the comments or share with us on Twitter or LinkedIn.

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“Due to Twitter’s innovative, yet immediate and informal, nature, tweets made by public companies and their employees may create a higher risk of violating US securities laws because the substance of each tweet may not be as thoroughly vetted as information that is disclosed through traditional channels of communication. Twitter’s appeal as a tool for companies to use to quickly dispense information to the public heightens these risks”.

Some of the issues brought to light have been widely discussed in the IR world (i.e. Reg FD).  However, they dig a bit deeper into other areas such as Exchange Act Rule 10b-5, which (like any other statement made by the company) would bind tweets by antifraud provisions.  They also confer on how companies should handle information that resides on Twitter (i.e. can stale information be deleted and/or archived somewhere).

The ideas they present are very thorough.  They even present some suggestions for combating these issues and provide a list of best practices at the end.  It is worth the read, but I thought I would provide a rundown of the main ideas.  Where applicable, I’ll also offer an Investor Relations (IR) perspective based on insights gathered from research Q4 has conducted on the use of Twitter for IR and in speaking with various IR professionals.

Reg FD

In a nutshell, an issuer must disclose material nonpublic information to everyone at the same time.  As we know, the most common way to do this is via a broadly disseminated press release or on a publicized call or webcast to which access is provided to everyone.  The article states that Twitter cannot substitute for other, more broadly used means for disseminating as it is unclear whether a tweet would be deemed a communication to shareholders or market professionals.  Therefore, companies should presume that Reg FD applies to tweets.

In my discussions with IR professionals, Reg FD is one of the top reasons why public companies don’t use social networks for IR.  So the authors are correct when they state that companies should surmise that tweets are governed by Reg FD.

Further, they go on to say, that on its own, Twitter does not distribute the information to the public in a broad, non-exclusionary way.  Therefore Twitter should not be considered a primary method of disclosing and disseminating information, but rather should only supplement the more traditional forms of disclosure and dissemination.  In our Twitter for IR report, we found that virtually all public companies are using Twitter as a channel to supplement traditional disclosure channels.

Best Practice Tip:

If a company is using Twitter in conjunction with some other method to disclose material information, the authors suggest they should provide advance notice with appropriate details, when for example, they are going to live-tweet their earnings call.

I would go on to add that if a company is using Twitter to supplement their other disclosure channels, they should say so.  For example, saying something like “Follow us on Twitter and provide the link: http://twitter.com/q4websystems” which can be easily included in a standard boilerplate or FLS used for press releases and other company documents shared with the public.  After all, why be on a social network if you aren’t going to disclose this to your key audiences?

Exchange Act Rule 10b-5

According to the definition provided in the article “This Act prohibits untrue statements of material fact and omissions of material facts that make what have been said misleading”.  In other words, just like any other statements made by the company, Tweets would be bound by antifraud provisions.  So, employees acting as company representatives are not exempt from any material misstatements or omissions by purporting to speak in their individual capacities.

The authors argue that “the casual and immediate nature of tweets and the appeal of being able to quickly disseminate information poses risk that a statement would create a Rule 10b-5 violation”. They also point out that Twitter’s 140-character limit could create additional risk due to a potential for misinterpreting a tweet based on its brevity.

There are a few ways that companies can mitigate the potential for shareholders misinterpreting a tweet:

• Preparing tweets in advance of the call. This is easily done by extracting key messages from the release and the script. Compiling the information for the tweets prior to the call will ensure consistent messaging and help mitigate the risk of tweeting anything that was not previously disclosed over an approved disclosure channel.
• Providing a link to the materials associated with the live event.  For example, providing a link to the press release and presentation would provide followers with the complete information for the call.

Some additional ways that will also help mitigate liability:

• Company policy that outlines exactly what employees can and cannot tweet about.
• Disclaimers that are provided on Twitter profile and on website about use of Twitter.
• Links to your own website and blog.  You could also reference a link that appears on a page on your website (which may appear in a list of other links) and provides the necessary disclaimers.

Archiving Information

The authors have some interesting observations regarding the information that is now housed on Twitter:

• The brevity that is required for a tweet limits a user’s ability to archive information or delete material that is out-of-date.  As previously mentioned, providing the disclaimer at the beginning of the call will help mitigate liability.  Hashtags are widely used by Twitter users to tweet conferences, quarterly calls and conduct on-line chats.  Hashtags allow users to follow along live.

They also allow a user to search by the specific topic at a later date and read the thread.  As far as dealing with information that is out-of-date the tweets are clearly time-stamped:

Also with respect to quarterly call tweets, companies like Weg S.A. make it easy to discern what quarter the tweet applies to:

• A post that is later viewed as problematic cannot be edited to include such disclaimers.  As previously mentioned, preparing the tweets using hashtags that specifically denote the session will help avoid confusion as to whether the information is new or not.
• Chronological representation of tweets inhibits the ability to archive historical materials and statements to a separate section of the Twitter page to store the information.  The authors specifically state “….historical statements…cannot be archived on a separate Twitter page to store the information”.  In my opinion, this is splitting hairs a bit, as Wikipedia broadly defines Twitter as “a free social networking and micro-blogging service that enables its users to send and receive messages known as tweets”.   Case in point, research we conducted on the use of Twitter for IR found that the majority of companies are primarily using Twitter for sharing links to materials that reside on their IR website already disclosed through Reg FD channels.  So providing a disclaimer on your Twitter profile that directs people back to your IR website will alleviate any notion that Twitter is the primary place that you post material information.  As for archiving historical statements I can say that hashtags would help a company archive statements pertaining to a specific event (as I have done this for webinars we have tweeted and was able to search for the specific event and compile the tweets).
• Hyperlinks to third-party websites exposes a company to liability if there is an inference that the company approved or endorsed the information.  The authors then go on to cite that the “SEC does not feel a disclaimer alone is insufficient to insulate a company from antifraud liability and encouraged issuers to describe the purpose of the link, use an “exit notice” or “intermediate screen” so that a user knows that the third-party content is not company information and avoid links to only favourable information”.

If this was applicable to tweets, there are a few issues that could be raised to dispute the enforcement of this by the SEC:

• Technically tweet an article or sharing other third-party information you are not linking back to your website, so it would be difficult to say that a company was “endorsing” the information that is being tweeted.  However, a company could preface the tweet by stating for example: interesting article from Wall Street Journal and then link to the article housed on the WSJ’s website.
• If users find interesting information they want to share, it can be retweeted.  Retweeting complicates the liability as should the onus apply to the person who initially provided the link and the person who RT’d it?  Tweets get retweeted all the time, so this would be an onerous policing undertaking for the SEC.

The authors have provided some good examples of potential compliance issues for public companies to consider for using Twitter as part of their corporate strategy.  While some of the arguments are stronger than others, it is important that you read and be cognizant of these issues so you can take the necessary steps to prevent liability problems.

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The focus of the paper is how online communication tools, in particular social media, are influencing the communication practices of corporate IR departments at public companies of all sizes. It also examines the question of why corporate IR departments have been slower to adopt social media communications tools than their marketing and corporate communications counterparts.

Dave currently splits his time between teaching public relations in the Department of Journalism and Mass Communication at Abilene Christian University in Texas and works as Director of Investor Relations and Corporate Communications for First Financial Bankshares, Inc. (Nasdaq:FFIN).

While I highly recommend that you take the time to view the presentation in its entirety (below), I have summarized some of the key findings.

LETTING OTHERS TAKE THE LEAD

The use of social networks by public companies has increased, although many companies are still sitting on the sidelines watching to see what evolves. The following stats indicate that the realm of investor relations has been slow in the adoption of social media:

• A study by Barnes and Mattson, confirmed that 57% of all large charities use blogs, compared with 41% for colleges and universities and only 16% for Fortune 500 corporations.
• The same study also found only 28% of the corporate blogs linked to Twitter accounts, 21% linked to corporate videos and only 10% linked to podcasts.
• An informal survey conducted by Bulldog Reporter’s IR Alert of 270 IROs and CFO’s, found that only 12.5% of respondents use social media to disseminate financial information to shareholders and the financial markets.
• Further, large companies (as defined in Bulldog’s study as those with $500 million or more of annual sales) fared even worse, with only 3% using social media as part of their IR communications.

The reluctance of IR departments to pursue social media is surprising given the evidence that institutional investors and analysts are using social media tools for both business and personal reasons:

• A survey of 455 analysts and institutional investors in July by the Brunswick Group found that 42% read blogs and that 20% stated they had used the information on a blog to make an investment decision or recommendation.
• The Brunswick study also found that 58% of its respondents believe social media will become increasingly important in helping them make investment decisions.

Institutional investors and analysts are already using corporate websites to seek out company information. A study by Rivel Research Group supports this, reporting that 75% of institutional investors look for information on corporate websites “weekly if not daily”.

Evidence is growing that institutional investors and analysts, already accustomed to searching corporate websites for information, are now turning to social media. For example, sites such as Seeking Alpha, the largest financial blog aggregator, has hundreds of blogs by ex-analysts, professional investors and fund managers.

LEGAL AND REGULATORY CONCERNS

While some IRO’s are sitting on the sidelines because they don’t yet see the value of social media, the primary holdback to adoption is both legal and regulatory issues.

The SEC has sent mixed messages since they issued their “Commission Guidance on the Use of Company Web Sites” in August 2008. On the one hand, the report praised the Internet for allowing companies to make information available to investors “quickly and in a cost-effective manner”. On the other hand, the same report cautioned that the antifraud provisions of federal securities laws apply to blogs and to electronic shareholder forums in the same way they do to traditional forms of corporate communication.

However, while the SEC may not have given the definitive green light to using social media for IR, some feel they are showing tolerance and they recognize that companies are still trying to figure out whether these newer forms of online communications fit into their broader communications strategy.

There is a general consensus within the IR field that social media is a supplement to existing disclosures and won’t replace news releases, SEC filings or conference calls in the near future, if ever. In a recent webinar hosted by Business Wire, Carol Stubblefield, a securities and corporate law specialist with Baker and McKenzie reinforced the aforementioned by stating “You should do social media on top of what you are already doing, not as a replacement”. She then emphasized the importance of establishing social media disclosure policies and informing employees about the company’s policy toward their use of Twitter, blogs and other channels for discussing company business.

SOCIAL MEDIA PIONEERS

Despite the ambiguity of legal and regulatory issues, a small-but-growing number of companies are using social media for IR. Within this group, Twitter has emerged as the early favorite due to its simplicity and ability to link back to news releases, conference call announcements and other disclosure information thatresides on the company’s website.

Research that supports this includes:

• A recent study by Q4 which identified that 55% (of a sample of 80 companies with Twitter accounts), are using Twitter for IR, with the companies mainly providing links back to their earnings release, conference call notice and webcast.
• A few of the companies included in the study – eBay and CGI group even live-tweeted the earnings call. Both of these companies type the tweets out ahead of time, which are derived from the conference call script, ensuring that they only post words on Twitter that are being communicated on the conference call.
• Other uses of Twitter by public companies include reporting from annual shareholder meetings (J&J and EMC Corp) and analyst days (eBay).
• Dell does have a Twitter account, but they are believed to have the first corporate blog dedicated to investor relations – each quarter, Dell records a video conversation (Vlog) with its CFO to announce and explain recently disclosed earnings results.

Robert Williams, Director of IR for Dell was interviewed for the report and said he’s “surprised” that more large-cap companies have not followed Dell’s lead and established IR blogs. He cites the following three reasons:

1. The small size of most IR departments. Unlike Dell, which has seven people on its IR team, the average company has only one or two employees dedicated to IR.
2. A lack of understanding about blogs. Williams said many corporate executives worry that blogs will be difficult to manage and that they won’t be able to answer users’ questions.
3. The fear of disclosure mistakes and shareholder lawsuits.

Williams feels that it would be hard for a small (one or two person) IR department to manage a blog along with all other expected tasks, but in a recent webinar he listed five things for larger companies to consider before starting an IR blog:

1. The blog should not be used as a substitute for news releases, SEC filings and the traditional means for communicating material information.
2. It must be credible by communicating factual and accurate information and avoid expressing opinions on investor issues.
3. It should be strictly for investor communications and should not be used for marketing the company’s products and services.
4. An IR blog can be an effective tool to counter misperceptions about the company without responding to specific rumors.
5. It’s important to view the blog not only as a means for distributing information, but as a way of listening to what your investors are saying.

Public companies who are using social media for IR are finding they can leverage their time and investment by coordinating their efforts using multiple social media tools together. For example, both Dell and eBay use Twitter to announce new postings on their blogs and Dell posts its Vlogs on YouTube. This can significantly expand the audience and drive more traffic back to their website and blog.

OTHER SOCIAL NETWORKS

As stated, more companies seem to be using Twitter for IR than are using Facebook, LinkedIn and YouTube. For example, although Facebook is being used by public companies the pages appear to be managed by corporate communications, PR or marketing departments, not by IR.

Many companies in this study were found to include links from their corporate websites or blogs to accompanying information on Twitter, Facebook, LinkedIN, Flickr and YouTube. No companies were identified that use MySpace for IR.

Another emerging category of tools are document-sharing or “content” sites that allow IROs to expand the distribution and improve the display of existing types of corporate documents, such as news releases, presentations and SEC filings.

For example, SlideShare is one of the more popular document-sharing sites that enable companies (and individuals) to post PowerPoint presentations, PDFs and other document formats on a public site where they can be viewed. In a recent webinar by Q4, SlideShare was described by Q4’s co-founder and CEO, Darrell Heaps as “the YouTube of presentations”.

SlideShare makes it possible for a company’s presentation to go “viral” and be spread from investor to investor, either via e-mail, embedding on a blog or website, or through a host of other tools.

Lastly, Docstoc is another document sharing site with an emphasis on content other than presentations such as news releases or reports, which can then be shared by readers or embedded on their website and blogs.

IR & SOCIAL MEDIA: LOOKING AHEAD

According to Dave, “A growing number of IROs already understand the potential of social media, and it may be only a matter of time before social media tools become as mainstream as websites and conference calls in modern corporate IR work. The SEC could encourage this development by providing more definitive instructions to guide companies as they chart their way through these new waters. Those instructions would help eliminate the most worrisome objection to the use of social media at this time, the fear of regulatory and legal risk. Hopefully the SEC will partner with NIRI, the stock exchanges and other interested parties to develop critical guidelines for the use of social media in corporate investor relations practice.”

I completely agree, and (without dating myself too much) remember the day when people worried about having conference calls – now the investment community raises an eyebrow if a company doesn’t have an earnings call! More direction is needed by the SEC – while some companies are taking the first steps and becoming pioneers in their use of social media, others need some guidelines to help them get started.

I previously blogged about tips that can help IROs get the C-suite on-side with adopting social media for IR. Perhaps if concrete guidance is put out by the SEC, IROs could use this guidance (in addition to research that shows that public companies are using social networks for IR), to provide to their legal and management teams as evidence that social media can be used effectively if executed within regulatory guidelines for IR.

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Regulation FD

Last Update: August 14, 2009

These Compliance and Disclosure Interpretations (“C&DIs”) comprise the Division’s interpretations of Regulation FD. Some of these C&DIs were first published in prior Division publications and have been revised in some cases. The bracketed date following each C&DI is the latest date of publication or revision.

Section 101. Rule 100: General Rule Regarding Selective Disclosure

Question 101.01

Question: Can an issuer ever confirm selectively a forecast it has previously made to the public without triggering the rule’s public reporting requirements?

Answer: Yes. In assessing the materiality of an issuer’s confirmation of its own forecast, the issuer should consider whether the confirmation conveys any information above and beyond the original forecast and whether that additional information is itself material. That may depend on, among other things, the amount of time that has elapsed between the original forecast and the confirmation (or the amount of time elapsed since the last public confirmation, if applicable). For example, a confirmation of expected quarterly earnings made near the end of a quarter might convey information about how the issuer actually performed. In that respect, the inference a reasonable investor may draw from such a confirmation may differ significantly from the inference he or she may have drawn from the original forecast early in the quarter. The materiality of a confirmation also may depend on, among other things, intervening events. For example, if it is clear that the issuer’s forecast is highly dependent on a particular customer and the customer subsequently announces that it is ceasing operations, a confirmation by the issuer of a prior forecast may be material.

We note that a statement by an issuer that it has “not changed,” or that it is “still comfortable with,” a prior forecast is no different than a confirmation of a prior forecast. Moreover, under certain circumstances, an issuer’s reference to a prior forecast may imply that the issuer is confirming the forecast. If, when asked about a prior forecast, the issuer does not want to confirm it, the issuer may simply wish to say “no comment.” If an issuer wishes to refer back to the prior estimate without implicitly confirming it, the issuer should make clear that the prior estimate was as of the date it was given and is not being updated as of the time of the subsequent statement. [Aug. 14, 2009]
Question 101.02

Question: Does Regulation FD create a duty to update?

Answer: No. Regulation FD does not change existing law with respect to any duty to update. [Aug. 14, 2009]

Question 101.03

Question: Can an issuer ever review and comment on an analyst’s model privately without triggering Regulation FD’s disclosure requirements?

Answer: Yes. It depends on whether, in so doing, the issuer communicates material nonpublic information. For example, an issuer ordinarily would not be conveying material nonpublic information if it corrected historical facts that were a matter of public record. An issuer also would not be conveying such information if it shared seemingly inconsequential data which, pieced together with public information by a skilled analyst with knowledge of the issuer and the industry, helps form a mosaic that reveals material nonpublic information. It would not violate Regulation FD to reveal this type of data even if, when added to the analyst’s own fund of knowledge, it is used to construct his or her ultimate judgments about the issuer. An issuer may not, however, use the discussion of an analyst’s model as a vehicle for selectively communicating — either expressly or in code — material nonpublic information. [Aug. 14, 2009]
Question 101.04

Question: May an issuer provide material nonpublic information to analysts as long as the analysts expressly agree to maintain confidentiality until the information is public?

Answer: Yes. [Aug. 14, 2009]

Question 101.05

Question: If an issuer gets an agreement to maintain material nonpublic information in confidence, must it also get the additional statement that the recipient agrees not to trade on the information in order to rely on the exclusion in Rule 100(b)(2)(ii) of Regulation FD?

Answer: No. An express agreement to maintain the information in confidence is sufficient. If a recipient of material nonpublic information subject to such a confidentiality agreement trades or advises others to trade, he or she could face insider trading liability. [Aug. 14, 2009]

Question 101.06

Question: If an issuer wishes to rely on the confidentiality agreement exclusion of Regulation FD, is it sufficient to get an acknowledgment that the recipient of the material nonpublic information will not use the information in violation of the federal securities laws?

Answer: No. The recipient must expressly agree to keep the information confidential. [Aug. 14, 2009]

Question 101.07

Question: Must road show materials in connection with a registered public offering be disclosed under Regulation FD?

Answer: Any disclosure made “in connection with” a registered public offering of the type excluded from Regulation FD is not subject to Regulation FD. That includes road shows in those offerings. All other road shows are subject to Regulation FD in the absence of another applicable exclusion from Regulation FD. For example, a disclosure in a road show in an unregistered offering is subject to Regulation FD. Also, a disclosure in a road show made while the issuer is not in registration and is not otherwise engaged in a securities offering is subject to Regulation FD. If, however, those who receive road show information expressly agree to keep the material nonpublic information confidential, disclosure to them is not subject to Regulation FD. [Aug. 14, 2009]

Question 101.08

Question: A publicly traded company has decided to conduct a private placement of shares and then subsequently register the resale by those shareholders on a Form S-3 registration statement. The company and its investment bankers conduct mini-road shows over a three-day period during the private placement. Does the resale registration statement filed after completion of the private placement affect whether disclosure at the road shows is covered by Regulation FD?

Answer: No. The road shows are made in connection with an offering by the issuer that is not registered (i.e., the private placement), regardless of whether a registration statement is later filed for an offering by those who purchased in the private placement. [Aug. 14, 2009]

Question 101.09

Question: Can an issuer disclose material nonpublic information to its employees (who may also be shareholders) without making public disclosure of the information?

Answer: Yes. Rule 100(b)(1) states that Regulation FD applies to disclosures made to “any person outside the issuer.” Regulation FD does not apply to communications of confidential information to employees of the issuer. An issuer’s officers, directors, and other employees are subject to duties of trust and confidence and face insider trading liability if they trade or tip. [Aug. 14, 2009]

Question 101.10

Question: If an issuer has a policy that limits which senior officials are authorized to speak to persons enumerated in Rule 100(b)(1)(i) – (b)(1)(iv), will disclosures by senior officials not authorized to speak under the policy be subject to Regulation FD?

Answer: No. Selective disclosures of material nonpublic information by senior officials not authorized to speak to enumerated persons are made in breach of a duty of trust or confidence to the issuer and are not covered by Regulation FD. Such disclosures may, however, trigger liability under existing insider trading law. [Aug. 14, 2009]

Section 102. Rule 101: Definitions

Question 102.01

Question: If an issuer wants to make public disclosure of material nonpublic information under Regulation FD by means of a conference call, what information must the issuer provide in the notice and how far in advance should notice be given?

Answer: An adequate advance notice under Regulation FD must include the date, time, subject matter and call-in information for the conference call. Issuers also should consider the following non-exclusive factors in determining what constitutes adequate advance notice of a conference call:

• Timing: Public notice should be provided a reasonable period of time ahead of the conference call. For example, for a quarterly earnings announcement that the issuer makes on a regular basis, notice of several days would be reasonable. We recognize, however, that the period of notice may be shorter when unexpected events occur and the information is critical or time sensitive.
• Availability: If a transcript or re-play of the conference call will be available after it has occurred, for instance via the issuer’s website, we encourage issuers to indicate in the notice how, and for how long, such a record will be available to the public. [Aug. 14, 2009]

Question 102.02

Question: Could an Exchange Act filing other than a Form 8-K, such as a Form 10-Q or proxy statement, constitute public disclosure?

Answer: Yes. In general, including information in a document publicly filed on EDGAR with the SEC within the time frames that Regulation FD requires would satisfy the rule. In considering whether that disclosure is sufficient, however, companies must take care to bring the disclosure to the attention of readers of the document, must not bury the information, and must not make the disclosure in a piecemeal fashion throughout the filing. [Aug. 14, 2009]

Question 102.03

Question: For purposes of Regulation FD, must an issuer wait some period of time after making a filing or furnishing a report on EDGAR that complies with the Exchange Act before making disclosure of the same information in a non-public meeting?

Answer: Prior to making disclosure of this information in a non-public meeting, the issuer need only confirm that the filing or furnished report has been accepted for filing on EDGAR and is publicly available on EDGAR. [Aug. 14, 2009]

Question 102.04

Question: During a nonpublic meeting with analysts, an issuer’s CEO provides material nonpublic information on a subject she had not planned to cover. Although the CEO had not planned to disclose this information when she entered the meeting, after hearing the direction of the discussion, she decided to provide it, knowing that the information was material and nonpublic. Would this be considered an intentional disclosure that violated Regulation FD because no simultaneous public disclosure was made?

Answer: Yes. A disclosure is “intentional” under Rule 101(a) when the person making it either knows, or is reckless in not knowing, that the information he or she is communicating is both material and nonpublic. In this example, the CEO knew that the information was material and nonpublic, so the disclosure was intentional, even though she did not originally plan to make it. [Aug. 14, 2009]

Question 102.05

Question: Can an issuer satisfy Regulation FD’s public disclosure requirement by disclosing material nonpublic information in a speech at a shareholder meeting open to the public? The meeting will not be covered by the press, or webcast or broadcast by any electronic means.

Answer: No. Under Rule 101(e), public disclosure of information required to be disclosed by Rule 100(a) can be made either by furnishing or filing with the Commission a Form 8-K disclosing that information, or by disseminating the information through another method or combination of methods of disclosure “that is reasonably designed to provide broad, non-exclusionary distribution of the information to the public.” A meeting that is open to the public but not otherwise webcast or broadcast by any electronic means is not a method of disclosure “reasonably designed to provide broad, non-exclusionary distribution of the information to the public.” [Aug. 14, 2009]

Question 102.06

Question: Does the mere presence of the press at an otherwise non-public meeting attended by persons outside the issuer described in paragraph (b)(1) of Rule 100 under Regulation FD render the meeting public for purposes of Regulation FD?

Answer: No. [Aug. 14, 2009]

Question 102.07

Question: What are the circumstances under which information posted on a company web site (whether by or on behalf of such company) would be considered “public” for purposes of evaluating the (1) applicability of Regulation FD to subsequent private discussions or disclosure of the posted information and (2) satisfaction of Regulation FD’s “public disclosure” requirement?

Answer: The Commission has provided guidance on both of these questions in its interpretive release, “Commission Guidance on the Use of Company Web Sites,” Exchange Act Release No. 58288 (Aug. 1, 2008). [Aug. 14, 2009]

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We had another great turnout and a lot of insightful questions at the end.  The team at Q4 did tweet the event, but we thought we would provide an overview of the salient points for those of you who missed it:

AGENDA

• Key trends
• Financial social networks and blogs
• Examples of companies using social media today
• How to get started
• Monitoring
• Risks

KEY TRENDS

1. In August of last year, the SEC issued new Reg FD guidance which “under certain circumstances” supported corporate websites and blogs as recognized channels of fair disclosure.
2. SEC also issued their support for shareholder forums.
3. Nielsen online report issued in March 2009, states that 67% of the global online population uses social networks and blogs – up from 58% the same time last year.
4. Study by Rivel Research Group in 2007 that states that 75% of pro investors use corporate websites weekly if not daily.
5. Slow decline in the number of sell side analysts are helping to push coverage and equity research to the social web.
6. Competition for capital is fierce – as there has been a steady decline in the number of IPOs in recent years.

All of these trends have helped to initiate a change in the market over time which has seen the increased use of the web and social media to communicate with key audiences.  Traditional channels are no longer effective on their own and companies who adopt these new channels are able to differentiate and compete more effectively for capital.

FINANCIAL SOCIAL NETWORKS AND BLOGS

Seeking Alpha – largest financial blog aggregator partnered with Yahoo!Finance; four million unique users/month (25% are institutional investors).

StockTwits – trading social network based on Twitter; has around 85,000 users, adding 500 a day; linked to whalewisdom and now available through Bloomberg.

Wikinvest – part of a new wave of contributor driven communities; finance portal; social interactive data.

EXAMPLES OF COMPANIES USING SOCIAL MEDIA TODAY

Q4 has been keeping a close eye on the use of social media and investor relations.  Part of our findings is that in addition to traditional channels of disclosure, Twitter seems to be one of the initial social networks companies are using.  For example, it is being used as a notification system linking to headlines and other content already posted on their websites.  All of the content that these companies share has been previously disclosed through RegFD channels.

A total of 12 examples of companies using Twitter were provided (note this was not an exhaustive list, but rather a sampling of a variety of sizes and sectors):

UPS; Catch The Wind; West 49; Johnson & Johnson; Dell; Ebay; Sun Microsystems; CGI Group; Shell; Chevron; Rio Tinto; Barrick Gold.

Blogs aren’t really that common, but the handful of companies using them (eBay, Sun and Dell) are doing a great job.  Facebook has not been used for IR purposes but more for marketing and HR.  Interestingly it is used the most to share pages.  Lastly, we have been monitoring LinkedIn but we haven’t seen any companies who use it as another communications channel as of yet.

SLIDESHARE AND OTHER CONTENT NETWORKS

SlideShare is a social content network that Darrell calls “the YouTube of presentations”.  There are thousands of IR presentations on SlideShare and they recently added an IR category.  Other content networks include DocStoc and Scribd.

Using content networks increases your discoverability and gives people the ability to make your content viral which means it can be shared, disseminated and republished across the web to millions of retail and institutional investors.

FIVE STEPS TO GET STARTED USING SOCIAL MEDIA

1. Good IR website and follow best practices
   a. The IR website must be viewed as the primary channel
   b. Self-publishing control allows you to be strategic
   c. Ease of use, accessibility and transparent communication
   d. “Why invest?”
2. Create compelling content (news, presentations, events)
3. Make it social and include it on your site – upload your content to social content networks and then embed your site + provide RSS feeds for News, events and presentations
4. Use Twitter like a ”notice newswire’
   a. Tweet about news, events and presentations and link to IR website
   b. Manually post updates and/or use RSS feeds to automate
   c. Start small, learn and expand conversations over time
   (only share content through Twitter that has been previously disclosed, do not use it as a primary channel for disclosure – basically anything that is on your website is ok to tweet about)
5. Monitor the web and evolve over time (free ways to monitor include google alerts and other free tools i.e. http://search.twitter.com, http://socialmention.com).

RISKS

• Disclosure of material information should follow Reg.FD guidelines
• All social channels must be treated the same as traditional channels (disclosure controls)
• Only previously disclosed information should be shared (social channels should not be used for initial disclosure of material news, only after disclosure has taken place)
• Risks are from innocent updates in social networks – travel example
• Social media policy and training are important to mitigating risk

I think it’s safe to say that anyone who is interested in social media knows a company that is using it quite effectively for marketing, advertising and PR.  What is not widely known is the number of companies who are using it and how they are using it for IR.  It is still in its infancy for use in IR and it will be interesting to see where it evolves.

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