The Need for Speed with Investor Relations

How can investor relations professionals keep up with a rapid-fire world? Investor relations officers (IROs) have always needed to move quickly in the digital age. News travels faster than ever. Especially bad news. And IROs are on the hook to manage the fall-out. But what they’re experiencing in 2023 is enough to make even the most experienced IRO ponder early retirement. Consider:

Influential Market Makers Have Zero Filter

Influential executives inside (and outside) a company with strong social followings can wreak havoc with a company’s stock price. In January 2023, Tesla CEO Elon Musk tweeted that he was considering taking the company private. This tweet sent shockwaves through the financial markets and caused Tesla's stock price to fluctuate wildly. The Tesla IR team needed to respond instantly with a press release clarifying Musk’s comment and stating that the company was not currently in talks to go private.

Social Media Drives Market Price

In 2021, the world watched in fascination when publicly traded firms GameStop and AMC saw their valuations gyrate wildly as Redditers sought to put the squeeze on hedge fund investors – a phenomenon engineered in social media. Since then, we’ve seen rise of a whole class of so-called meme stocks whose value is practically dictated by the whims of social media. The rise of meme stocks has a spillover effect on all stocks. Social media can make a stock catch fire or implode, partly because there are more social media touchpoints for influencers to make their views go viral – even TikTok has become a source of investor news.

AI Accelerates the Flow of Information

AI-based predictive analytics, natural language processing, algorithmic trading, and risk management tools can help investors process and analyze data faster and more comprehensively than ever before. And even newer tools such as ChatGPT are being used by investors for sentiment analysis and summarizing news/opinions about a certain company or trend. IROs need to act more quickly. Since institutional investors can process data about a company, its competitors, and investment risks faster, IROs, in turn, need to respond faster.

One More Complication

Now, add to all that another pressure: IROs need to use every tool at their disposal to build trust with investors. They include more assets than ever to deliver a message in a compelling way. Webcasts. Multimedia announcements. The company website. ESG reporting updates. Quarterly results presentations. All of those assets need to be delivered and revised even as IROs respond to the crisis du jour, and they are not always easy to prepare and deliver quickly. But IROs have alternatives to keep up. They include:

Solution: A Closer Relationship with the CEO

An IRO needs to be a mind reader of their CEO. They have to anticipate what the CEO is thinking in order to provide proactive counsel. Doing this prevents surprises from happening and also makes the IRO more valuable to the company. Getting closer to the CEO means combining a mix of tried-and-true tactics (meeting with the CEO regularly) but also being a source of insight, such as sharing relevant and timely insight on news that could affect the company, collaborating on messaging and communication, and offering ongoing counsel in investor relations matters. Doing all this (and more) not only positions the IRO as a source of trusted insight, it also gives the IRO an opportunity to listen to what’s on the mind of the CEO. Don’t wait for the CEO to communicate. Reach out. And keep reaching out.

Solution: Reusable Assets

One of the more important developments recently – which many IROs are still sorting out – is tapping into a centralized repository of information that investors can easily access. Businesses need to embrace the notion of a content taxonomy, which includes reusable assets applied rapidly everywhere an IRO needs to communicate. IROs cannot afford to create and customize content for every audience and communications platform from scratch each time an event happens. They need reusable assets (e.g., images, text, and video) that can be configured and structured differently as required. A taxonomy consists of both the core assets plus metadata to make it possible to easily update the core asset and share it across multiple interfaces ranging from web pages to social sites – creating once and publishing everywhere. 

Solution: Modular-Based Websites

A modular-based website is a type of website design and development approach that emphasizes flexibility, reusability, and adaptability across different devices and screen sizes.

Modular-based design refers to breaking down the website's components into smaller, self-contained modules or building blocks. Each module serves a specific purpose and can be easily rearranged, combined, or reused across different pages or sections of the website. This modular approach allows for greater flexibility in designing and updating the website, as changes made to one module can be reflected throughout the entire site. A modular-based website enables IROs to make quick updates by simply modifying or replacing individual modules, rather than redesigning entire pages. This saves time and ensures that investors have access to the latest information promptly.

Let’s say a company needs to release its quarterly financial results promptly to its investors and analysts. With a modular-based website, the investor relations professional can quickly update the relevant financial module on the website without redesigning the entire page or website structure.

Instead of having to create an entirely new webpage or document for each financial report, the investor relations professional can simply update the existing financial module with the latest figures, charts, and analysis. This modular approach allows for efficient and targeted updates, ensuring that investors have access to the most recent financial information as soon as possible.

What IROs Should Do

At Investis Digital (iDX), we help IROs craft compelling narratives through our own corporate comms/IR expertise. We also publish some of our ideas with thought leadership. Thriving in a faster paced environment is one of the major challenges that iDX discusses in a recently published white paper, How to Crush Every Investor Relations Challenge in Your Path. The white paper draws on 20+ years of experience helping IROs create compelling narratives that build trust with investors, as well as the data and insight we have collected over this time. Our strategic counsel, bespoke IR websites, data analytics, secure webcasting capabilities, and a 15-minute response time are all part of our IR offerings.  

Learn more about them on our website, and read our white paper, How to Crush Every Investor Relations Challenge in Your Path, for more insight.