Thank you to all who responded to my survey here and on the Genzyme boards on the Motley Fool. The survey results were a key part of my presentation at two workshops on "Disclosure in Cyberspace" on Monday at the annual meeting of the National Investor Relations Institute. Here are the results I presented:
There were 111 respondents to the survey.
92% check the Genzyme threads at least once a week. More than 1/3 check daily.
Most are lurkers. 90% rarely or never post to the Genzyme threads.
79% are owners of one or more Genzyme stocks. The rest are considering buying the stock.
88% are individuals investors, the other 12% are pros: stockbrokers, analysts, and portfolio managers.
97% (including all of the pros) said my participation in the Genzyme threads is "very useful."
At the workshops, I quoted from some of the statements respondents sent me. Overwhelmingly, the statements underscored the tremendous value investors get from company participation in on-line discussions. Many respondents made it clear that the ability (or inability) to obtain timely and thorough information from a company was a major factor in their decision to buy and sell that company's stock.
Despite this undeniable evidence that participating on message boards is an effective way to develop good relations with individual investors, other speakers gave reasons why they thought IR officers should not do so. Among these reasons:
1) Everything posted in cyberspace is available to plantiffs' attorneys, enabling them to construct more plausible complaints in shareholder lawsuits.
2) Posting forward-looking information in cyberspace creates a legal duty to update that information whenever conditions change.
3) Individual investors don't move stocks; only sell-side analysts and large institutional investors do, according to a defense attorney who represents companies in shareholder lawsuits. Thus, in his view, candor in cyberspace carries significant risks but no significant benefits.
According to this lawyer, companies should give earnings guidance, forward-looking statements, and detailed, non-material information only verbally and only to sell-side analysts and institutions. He also warned us not to make conference call playbacks or transcripts avaliable to individual investors and not to allow the staff of the Motley Fool onto our conference calls.
Each of the two workshops attracted about 75 people. We took a poll at the second workshop and found that many of the IR officers in the room monitor message boards about their companies, but none post information or respond to questions on the boards.
Lou Thompson, CEO of NIRI and a supporter of more open disclosure by companies, pointed out that the SEC has been receiving complaints from individual investors about companies providing information selectively to analysts and institutions. He believes that the SEC may begin to press companies to level the playing field in information dissemination.
Steve Push
Genzyme Corp.
genzyme.com |
