Over the past few years the number of social channels have increased, as has the amount of users. Facebook, perhaps the largest and most famous social media channel had, as of December 2013, 1.23 billion monthly active users, with over 945 million of those accessing the site using mobile. Twitter meanwhile has around 5,000 tweets sent each second and boasts over 231 million active users, not to mention newer channels such as Instagram and Vine which focus solely on the visual aspects of communication.
Now, where does this fit in with investor relations? More and more people are turning to social channels to communicate, so from an investor’s perspective it’s great. With new and improved analytics tools, investors and traders alike can use social media to gain valuable market sentiment.
A recent article on Open Markets - an online magazine and blog - investigated how market participants are using social media. The article looked at how data mined from social channels can, with the right tools, give people an insight into how people feel about particular companies and stock. This can help bolster traders’ initial thoughts or could be used as a forum to look for telltale signs of changes in these sentiments.
Now, not only can analysts look at what is being said on social channels, they can use it to understand trends in attitudes and opinions. Couple this with the effect that misinformation can have on the markets - take the hacking of the Associated Press account and false report of an attack on the White House causing a temporary crash in the market - and social is becoming an increasingly important part of our daily lives, professionally as well as personally.
No matter how people use social media for investor relations, everyone should be aware of the potential ramifications that social data can have on a company.