That Posting From the CEO
Actually May Be Legitimate
By JASON ANDERS and CARRIE LEE
THE WALL STREET JOURNAL INTERACTIVE EDITION
It's no surprise that many corporate officials pay attention to what investors
are saying about their companies in online message boards.
And though some public-relations firms
counsel their clients to steer clear of the
rumor-filled and often nasty online
discussions, executives are increasing logging
on to talk directly with investors.
Consider David N. Kunkel, an executive vice president of PSINet, a big
Internet service provider based in Herndon, Va.. He started posting comments
on boards devoted to PSINet on Silicon Investor (www.techstocks.com) and
Yahoo (quote.yahoo.com) a year ago as a way to get the company's message
out to investors at a time when its stock was struggling.
"We've got a lot of information that gets put out on the Street. But the
individual investors ... weren't getting the message. They weren't getting the
same quality of information that the analyst community was," he says.
Mr. Kunkel has become so faithful to online participants that he found himself
posting messages on Thanksgiving Day this year. "Telecomguy, I had some
information for you on gross margin, and misplaced it," he wrote on Silicon
Investor, referring to a participant by his online handle. "Have not forgotten.
Am home with family and turkey, so I won't get it until next week."
The appearance of executives from established
companies like PSINet on message boards is a
bit of a departure from what has been seen in
recent years. While tiny, speculative companies
-- including many whose shares are quoted only
on the loosely regulated OTC Bulletin Board --
have used message boards to promote their
stocks, larger companies steered clear.
Among executives who have joined Mr. Kunkel in the online realm: Delbert
Yocam, chief executive of Inprise, a Scotts Valley, Calif., software firm
formally known as Borland International; Russell Horowitz, CEO of Go2Net,
the parent company of Silicon Investor; and Peter Q. Davis, chief executive of
the Bank of Commerce in San Diego.
Mr. Davis posted a message at the Motley Fool site within America Online in
September reassuring investors who were smarting from a nearly 50% drop
that the bank's stock suffered during the summer. "There are no problems ...
that would account for the stock's recent drop," he wrote at the time. Mr.
Davis says his postings never stray beyond what has been previously disclosed
in press releases, and all are reviewed by a lawyer.
Richard George, a director with the Public Relations Society of America in
New York, says companies can expect an enthusiastic response when they
reach out via the Net. "Any time you have a well-trained, high-ranking
official in a company that's willing to participate in a forum, it's a positive for
the company," he says. "Good public relations is a two-way street."
Still, many public-relations firms still advise clients to avoid the boards. "To
engage in the discussion can be very problematic," says Josh Pekarsky, a
partner at Kekst & Co. in New York. A company that decides to answer
innocuous questions can be drawn into difficult situations. "So many of the
questions are wild or speculative. Then, if you don't answer, people interpret
[that as a tacit reply] and act on it. It's a very slippery slope."
Kekst at times has advised clients to get involved in message boards, in a
limited way. In one case, a client beset with what it viewed as inaccurate
message-board chatter posted a message advising readers to visit the
company's Web site for official information.
Others shun insider participation under any circumstances. "We absolutely
would advise our clients not to. You just don't know what [participants']
interests are," says Herbert Corbin, managing partner with KCSA Public
Relations Worldwide, in New York. Mr. Corbin says KCSA monitors chat
groups and message boards for its clients, but doesn't respond to them.
Investors, of course, also face risks in believing posts that are signed with the
name of a corporate executive. Because of the anonymity of the Net, there is
no easy way to tell if the posting is legitimate.
Meanwhile, some companies have tried to steer the online discussion in a
more covert way. Tim Smith, a manager at NRW Interactive, a unit of
Niehaus Ryan Wong in South San Francisco, Calif., says his firm trolls the
boards for discussions about clients, and then sometimes feeds information to
the clients' online defenders. The hope is that the companies' champions will,
in turn, post that positive information on message boards.
All of this hasn't stopped the online world from paying attention. A posting
from a company executive can be viewed as something of a hidden jewel on
the boards, offering the hope of inside information. To keep track of these
sightings, a message board was created on Silicon Investor for participants to
swap stories, called "Companies Whose Management Post to SI." |
