Investor Relations and Social Media- Are You Engaged with Your Audience?

Have you ever heard of a “Perception Report”? OK, I will get into that in a minute or two…

A company’s performance in the marketplace with respect to stock volume and price is by in large, a function of investor’s perception of the company. I have spoken with countless CEOs and other management team members over the last few years and nearly all felt strongly that their stock was undervalued given the underlying fundamentals of the company.

Often times especially with micro and small cap companies, there is a “disconnect” between the company and the stock. This disconnect can be in either direction. I have seen companies that continue to perform on the business front while their stock goes completely unnoticed. Other companies have a business that is speculative at best with virtually no underlying fundamentals that trades heavily and gets a lot of attention. Why is this?

Fundamentals drive business but perception drives stocks. To some this is obvious, but without a lot of experience in the marketplace, it is not so obvious. I will say it again: I have spoken with countless management team members of public companies that do not understand that without some level of good to great perception, their stock will not trade. Oh sure, any company or “third party” can hire a “group” to provide liquidity in a stock for a day or two, or if they have the money to spend, for a longer period of time…

It is the objective of every publicly traded company’s management team to have their stock trade consistently and organically. For those that are reading this and do not know what organic trading is, it simply means that the stock trades without “market support”. In other words, you don’t need a team of manipulators working the stock to make it trade.

Let’s look at what drives perception:

• Emotion- Probably the biggest factor. Emotion is something that the stock trader wants to avoid but the investor must be emotionally involved with the company they invest in. You want investors to “marry” your company and stock.
• Visibility of the business. Is the company highly visible through marketing campaigns? (don’t confuse a marketing campaign on behalf of a company with stock promotion – apples and oranges)?
• Product or Service- Very important factor. In order to achieve some sort of emotional response, the company must have a product or service that the investor can understand and see a great need for.
• BUZZ- This is closely related to the 3 items above. Bottom line is: You company’s stock will not trade organically without some sort of buzz.

So this brings us to the “Perception Report”. Unlike the Research Report, which is paid for by the company or the “third party” the Perception Report is free. Finding out where you stand is an important first step. A map is navigate with is great but without knowing where you are, you cannot get to where you want to go.

What is in a “Perception Report”?

1. Website Analysis and “Grade”. This is important because a company’s website is the single most underutilized asset that I see most of the time. The average publicly traded company’s website cannot be found in the first few pages of search engines. The only way to “find” the company is to search by the company’s name. Most publicly traded company web pages have had some Search Engine Optimization (SEO) done on them but nevertheless, are still loaded with problems.
2. Conversation Monitoring: Most publicly traded companies look at stock message boards to find out what the sentiment is regarding their company. There is nearly a billion people worldwide using social media. I am finding now that most of these “conversations” regarding publicly traded companies are going taking place on Twitter, Facebook, Friendfeed and many other social media platforms. Knowing what the real sentiment is on your company is another valuable starting place. Not only will you know what is being said about your company but who is saying it. There are many other uses for conversation monitoring as well.
3. Reach and Influence: Your company no matter how big or small has a certain influence and reach across the Internet. Again, this is another important item to gauge.

By knowing and understanding where your company stands gives you a great place to start building a strategy. There is a lot more to measuring your company than stock performance.

When I measure a client’s performance under my program, Not only do I look at stock price and volume but how many new subscribers to their content they have, web page traffic, how many new business leads, how much new business have they generated as a result of my efforts? These are just a few things that I look at and as you can see, most of them have nothing to do with the stock price at all…

Tagged as: Investor relations, Investor Relations 2.0, micro cap, public relations, Search Engine Optimization, SEO, small cap, Social Media, stocks, website