Digital usage amongst institutional and retail investors is driving a lot of trades today, so most of your future investors will research your financial statements online before they buy stock.
While you can’t believe everything you read online, savvy investors know to stick to reputable sources like the SEC and your IR site when researching stock options. And as you’ll find out below, it’s often investor relations websites that drive results more than any other trusted source online.
Keep scrolling to find out where investors look for information about your company, and why the source matters.
Table of Contents
1. Your Investor Relations Website
According to Brunswick Group’s latest Digital Investor Survey, there is no better source of information than a company’s IR website.
They surveyed more than 500 institutional investors from across the world to understand how digital sources impact investment decisions. Their poll found that IR sites are the most used and most trusted amongst investors.
IR websites, on the whole, earned a trust rating of 8.4 out of 10, pulling out ahead of other traditional news sources like Bloomberg, Financial Times, and The Wall Street Journal.
More still, 92% of investors said they sought out a company’s IR website to investigate issues. Nearly two-thirds of these investors (72%) also reported they’ve used this information to make investment decisions.
With this much attention on your IR site, it’s a good thing you have total control over how your site looks and performs. It’s worth investing in beautiful web design and compelling copy to elevate your brand and financials so that your value proposition is as persuasive as it is credible.
2. Reddit and Other Social Media Platforms
Although more than half of investors (54%) report they have zero trust in Reddit as a news source, it would be unwise to overlook the power this social media platform has over your stocks. You only have to dial back to the beginning of the year to see how easily Redditors can disrupt the market.
The now infamous r/WallStreetBets was behind the GameStop blow-up on the market. Its members noticed how hedge funds were short selling the gaming company’s stock to pull its stock price down so that they could buy it back for less.
In retaliation, Redditors arranged a short squeeze of these securities to increase shares by nearly 30 times, and the short-selling hedge funds had to accept enormous losses to regain their securities.
While a squeeze of this size probably won’t happen to your stocks, it’s in your best interests to understand the motivations behind retail investors, including those who scroll through r/WallStreetBets. They’re growing to take a larger piece of the pie, with the influence on your stocks to match.
3. The Securities and Exchange Commission (SEC)
The U.S. Securities and Exchange Commission is an official resource for when investors want to see the cold, hard numbers. They can find your company’s filings through the SEC’s EDGAR database.
Standing for the Electronic Data Gathering, Analysis, and Retrieval system, EDGAR indexes the mandatory filings collected by the SEC. These documents include annual, quarterly, and current reports, as well as insider trading, institutional investments, and event reports.
Why Does it Matter Where Investors Turn to for Information?
Now it’s time to get to the most important question: why should IROs care about where investors learn about assets and liabilities? It’s all about perspective. By understanding where potential and current investors are coming from, you have a better idea of where they’re going to go.
This information can supplement (but not replace) traditional stock surveillance to help you identify the right potential investor and react quickly to market sentiments.
About Carson Derrow
