Investment Communications instead of Investor Relations? Shareholder Communications? They ask me, “Are you on drugs?” OK let me explain what, in my opinion, is going on with “IR”. IR means Investor Relations of course. IR can be any number of things in the microcap and smallcap world. It can be a dedicated phone and email representative that does nothing more than answer calls and emails from investors or interested parties in the company they are representing. It can be at the opposite end of the spectrum in the form of a “group” that is 
“working the stock” with their networks. Traditional IR has little if anything to do with any sort of two way communications between companies, their investors or the investment community. It’s traditionally a one way path. If you call IR and get someone on the phone, they will talk to you a little but then want to send you an “investment package” with all the information that you can easily find on the internet.
Communications
The world has changed and most people don’t realize it yet. The way business is done now is different than it was just 2 or 3 years ago. With the advent of the social networks that exist throughout the internet today, there is no reason why companies are not tapping into the vast resources that The Global Social Network offers. Most are unaware of it. Most of the big, successful companies understand the importance of social networking; they are using it to their benefit. Examples of social networks include YouTube, LinkedIn, Twitter, Facebook etc… Customers, prospective clients and investors now demand this two way communication. They want to know, communicate and trust who they do business with or buy stock in. Without the use of these social networks, companies stand little chance of success of their business or their stock in this new world.
Under-utilization of a Powerful Asset- The Shareholders
Many microcap companies see their stock as only a tool to raise money. The company has no face, just a name and their shareholders are just a number to them. On the other hand, those companies that realize that their shareholders are a powerful asset are way ahead of the companies that use their stock as a money-raising tool. Those companies that team with their shareholders and have open and honest communications see far better results business-wise and in the marketplace. Those that raise money from stock sales end up as very inexpensive stocks. They ultimately have to “clean up” their stock and conduct a reverse split which effectively eliminates almost all of their shareholders altogether. You can bet that those shareholders will never invest in that company again and they will tell all their friends and anyone else that will listen about how that company hosed them. The shareholders of the companies that communicate well with them will also tell their friends and anyone else that will listen what a great company they are invested in.
Shareholder Communications
The representative in this new world will have the title of “Shareholder Communications” or “Investment Communications” instead of investor relations. Just the two words “investor relations” strung together or “IR” turns investors off now. Shareholder and Investment Communications will be a more comprehensive job; it will involve two way communications between the business and investment world. The companies that are successful will be the ones that articulate their message the best to the masses that are now involved deeply in the social media structure. They will be the ones that answer the questions from the masses in a clear and concise manner. They will be the ones that engage the markets in conversation, not the ones that advertise better or promote themselves better. They will have to constantly innovate because the landscape changes all the time.
The Markets have Superior Intelligence
I know this may sound radical; the fact of the matter is that the market is now far more intelligent, innovative and more organized than the companies themselves. At almost every level the market has figured out that the best information exists in this global social network, not the information coming from the companies in a one way path. The smart companies have already entered this network and have become a part of it. Item number one from the 95 Theses of the Cluetrain Manifesto is “markets are conversations”. The days of one way communication of mass media is over. Enter Web 2.0: The People.
Many company officials are of the opinion that the markets are slow; they can’t get anything done; no one is listening to them. The problem is that the companies are not listening to the market. The market has been crying out for open, honest, two-way communication and not getting any response from the companies. The market doesn’t want to hear from “IR” or read text based news releases anymore. The markets do not want the companies blasted out in one of the 210 BILLION emails sent around the world each day. They do not want companies profiled for cash and stock on web pages. In this new world, IR, emails, profiles and a one way message will be like bringing a knife to a gunfight- sure death.
They want a CONVERSATION with the management of the company; anything less will simply not do.
