February 16, 2012

Two Names You Should Know: “StockTwits” and “MarketBrief”

When I was on my social media speaking tour last year, I talked quite a bit about two new services that were changing the way that investors received and shared information. These two services really are game-changers and show how social media is changing the investment world just as much as any other industry.

The first is StockTwits, which is an online financial community that enables investors to share their market insights, ideas, charts and news in real time in a Twitter-like manner. In other words, StockTwits takes the chaos out of Twitter by organizing tweets by company (the filter is the dollar sign in front of a company’s stock symbol – tweets that do this are then included in a company’s message stream on StockTwits and Twitter, as well as other social networks and financial websites); here are instructions on how to try it out.

After four years in operation, StockTwits really has taken off with well over 150,000 investors of all types using the platform (this recent article explains more). Remember that time is money – and studies have shown that news travels faster through online platforms than through the news wires (see this article for example).

Here are three examples of the growing power of StockTwits:

1. StockTwits has partnered with mainstream media channels to distribute news, including Yahoo Finance, Bloomberg, CNN Money, Reuters and others, as well as social media platforms including Twitter, Facebook and LinkedIn.

2. Starting last summer, investor relations departments at a number of public companies began managing and utilizing their “official” profile and ticker pages on StockTwits to create a verifiable presence on the platform. In other words, companies can distribute their own messages on StockTwits and investors reading them know they truly are from the company. Since this is where a company’s shareholders (and potential shareholders) are gathering online, these companies smartly have gone to where the action is to participate, which can be as simple as tweeting links to SEC filings and press releases as they come out.

3. As reflected on this StockTwits page, investors can choose to “follow” the analysis provided by specific analysts that they like. In this way, StockTwits facilitates whom investors choose to obtain their information to make investment decisions.

MarketBrief is the second service that is changing the way investors consume information – and it was only launched last August. As explained in this article, MarketBrief’s computers take SEC filings as they are made and converts them into tweets. That is, they cram the essence of the SEC filing into 140 characters in about a second. Mind-blowing. And as noted in this announcement, these two have teamed up so MarketBrief’s summaries flow through StockTwits.

For those out there that aren’t tech-savvy, it is not hard to learn the basics of what is happening here and it’s important that you do because these are not like the Yahoo message boards of the ’90s. These are much more powerful and reliance on them by sophisticated (and large) investors will only grow…

Introducing AnalytixInsight

Recently, I was trying the free beta for the AnalytixInsight service and came away amazed about what technology can do these days. Among other interesting things, its computers can crunch numbers and other publicly available information (click on the “Fundamental Analysis” tab) and put together a lengthy report that is akin to an analyst’s research report.

In this podcast, John Ballow of AnalytixInsight discusses his AnalytixInsight service and what it can do, including:

– What is the AnalytixInsight service?
– How would public companies use this service?
– How does these tools relate to say-on-pay?
– How can companies dispute content that they view as erroneous?

The Regulatory View on Social Media

Brink Dickerson of Troutman Sanders give us these thoughts:

The recent discussion of the CEO of WebMediaBrands highlighted the importance of thoughtful social media policies. But before you conclude that those policies are the domain of just the securities and IP/IT lawyers, you need to consider the NLRB’s view on social media as recently expressed in a report by the NLRB’s general counsel.

In the NLRB’s view, there are significant limitations on companies’ ability to constrain communications that relate to “concerted action,” and it takes a very broad view of the different types of statements that might be concerted action. As a result, social media policies that are absolute in their prohibitions – e.g., a prohibition on employees publicly discussing financial results, a perfectly reasonable prohibition from a securities lawyer’s perspective – could run afoul of the NLRB’s views.

For instance, a company may or may not be able to prohibit an employee’s posting on his or her Facebook page, even if the posting precedes any other public announcement by the company, that “The company made $152 million last quarter and can afford to pay us more.” In reality, this is an extreme example and probably could be constrained somewhat, but the boundary line is not far from it. As a result, companies need to factor in not just Reg. FD and other securities laws when they consider their social media policies, but also the NLRB’s views.

– Broc Romanek