This week, most of us will spend some time reflecting on the various events that have shaped the past year of our lives. For the team here at Finmaven this is no exception. Internally we have experienced tremendous growth and excitement fueled by some significant events in the world of finance and social media. The Security and Exchange Commission made substantial changes to its regulations, many companies profited from creative online endeavors, and a few organizations (or should we say individuals) taught onlookers what not to do online. As we look back on the past 365 days it is undeniable that this relatively new form of communication has become a major game changer. To showcase this year's social shift here are 8 of the most important social media events of 2013 in relation to the financial services.
1. SEC Embraces Social
On April 2nd 2013, the Securities and Exchange Commission ruled that public companies were legally allowed to disclose material information via social media networks provided that a company that chooses to do so informs investors ahead of time. This change in regulation, which paved the way for many important events this year, signifies the adoption of social media into financial services. Finance professionals from all angles are now far more interested in keeping a finger on the pulse of social media for marketing, IR, and risk management purposes. Read more
2. Twitter's Initial Public Offering
For the sake of symbolism, Twitter's decision to list its shares on the NYSE is included in our account of most important events of 2013. With a tweeted (how fitting) press release mid September, this social media trendsetter showed us how powerful this platform really is. The message was re-tweeted over 14,000 times leading to heavy anticipation as investors geared up to own a piece of the micro-blogging site for the controversial price of $26 a share. Read more
3. Videos of quarterly earnings reports
This year, Netflix and Yahoo stepped outside the comfort zone by abandoning traditional earnings report formats and instead presented their Q2 findings by video in a Google+ Hangouts on Air session. The unconventional press release offered investors and the media a chance to interact with the company on a more personal level and demonstrated how the field of Investor Relations is incorporating new, more effective, communication mediums.
4. Dow Jones Hash-Crash
There is perhaps no better example of Twitter's power to move markets than what happened to the Dow Jones Index on April 23 2013 after a hacker sent a fake message through the Associated Press' twitter account. The 71-character post claiming that Obama had been injured after two explosions at the White House resulted in a 145-point drop on the country's main financial index. The transgression not only caused many corporations to revisit the security settings of their social media accounts but also drew attention to the size and influence of audiences within social networks. Read more
5. JP Morgan BashTag
JP Morgan was forced to cancel a twitter-based Q&A session after a conversation under the hashtag #AskJPM, became the target of unanticipated attacks on the company. The twitter hashtag was intended to give college students a chance to communicate directly with a top executive about career and leadership advice but backfired when tweeters used the opportunity to express their frustrations and dislike for the bank. The situation only got worse for JP Morgan as the tweets became more and more sarcastic and entertaining. The PR nightmare, although damaging to JP Morgan's reputation, has given witnesses some needed guidance on social media mistakes to look out for. Read more
6. Carl Icahn strikes on Twitter
Given a new outlet, influential investors like Carl Icahn hold even more power than before. With a single tweet on August 13th Apple's stock rose 12.5 billion dollars! This event surprised even the most veteran investors who had yet to see such a compelling example of twitter's impact on financial communications. On the flip side, many IROs saw an opportunity to capitalize from a new method of identifying shareholders who hold clout with investors. Read more
7. Lululemon Meltdown
Lululemon's stock price took a beating this year after two reputation-killing events. In March, after complaints of sheer yoga pants populated the company's social media sites, Lululemon tried to contain the negative press by recalling defects and accepting blame. Before their stock had a chance to recover, a disastrous interview with Lululemon founder Chip Wilson circulated with even more ferocity. The statement that "some women's bodies' just actually don't work for it" (referring to the yoga pants in question) due to "rubbing through the thighs" generated a backlash of angry ex-lulu supporters contributing to plummeting stock prices and Wilson's inevitable resignation earlier this month. Read more
8. Ashton Kutcher takes on Wal-Mart
Celebrity actor and producer Ashton Kutcher, angered (like many others) by Wal-Mart's employee holiday food-drive, tweeted to the company on November 19th, saying "Walmart is your profit margin so important you can't Pay Your Employees enough to be above the poverty line?". Considering Kutcher's record-breaking number of followers and his reputation as a successful investor, he is certainly one tweeter you want to keep on your good side. Unsurprisingly, Wal-Mart responded promptly by defending their HR practices and attempting to defuse what was already a hot topic considering recent employee protests. The decisions companies make, like whether it's a good idea to hold an employee food drive or what to pay employees, must be considered in greater context than ever before. With the advancement of social media, the public is further empowered to hold decision-makers accountable and force corporations to maintain transparency. Read more
As the relationship between social media and finance strengthens and evolves, it is nice to take a look back at the journey we've taken so far. We hope to see the same excitement carry through in the New Year as individuals and organizations increasingly incorporate this dynamic medium into their communication efforts. The team at Finmaven is looking forward to supporting this movement by providing insight, innovation, and the tools you need to make the most of your social media endeavors!