04 Jun THE PERILS OF EXECUTIVE TWEETING; THE POWER OF RETAIL INVESTORS
Welcome to this week’s business and media intelligence update.
MANAGING MUSK: THE PERILS OF EXECUTIVE TWEETING
Tesla CEO Elon Musk served as a useful reminder this week of the perils of executive tweeting.
On Wednesday, the iconoclastic founder copped a US$200 million fine from the US Securities and Exchange Commission for violating (again) a 2018 agreement mandating that his social media posts must be preapproved by company lawyers. This comes as no surprise, as Musk has violated the agreement on multiple occasions in the past three years. Back in May 2020, a tweet by Musk wiped US$14 billion off the carmaker’s value after tweeting its share price was too high.
Musk and his tense relationship with the SEC are a reminder that in the information age, senior executive’s social media presence, whether it be posts on Twitter or Instagram, are all regarded as public statements that can have serious, market-moving consequences and impact their company’s value and image.
THE POWER OF RETAIL INVESTORS
American company AMC Entertainment is the latest riding the wave of “meme stock” trading, after enthusiastic investors rallied behind the company, sending shares up 95 per cent, to close at an all-time high of US$62.55 per share.
These ‘meme stock’ traders, more commonly known as retail investors, are becoming a powerful force across the market. Easy-to-use trading apps and zero trading commissions have drawn in a new generation of traders, and social media is only fueling the fire, with threads on Reddit and Twitter building momentum for certain stocks.
There is an important lesson here for Australian companies, too: companies should not be turning a blind eye to these investors. In fact, they should be increasingly factoring them into targeted engagement and into all communications.
Retail investors now make up 80 per cent of AMC’s share register, and the company is now launching a program called AMC Investor Connect to keep in direct contact with those 3.2 million important investors.
ON THE COUCH WITH MICHAEL SMITH
Our regular podcast series is back! Tune in to listen to Cannings Associate Director, William Roberts interview Michael Smith, author of The Last Correspondent.
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