The David and Goliath battle between amateur traders and hedge funds played out over the WallStreetBets subreddit has redefined the rules of engagement for financial communication professionals.
WallStreetBets shows that a giant investment firm can now be undermined by a loose collection of online amateur retail investors – becoming the dominant market force when deciding the price of a listed company. In this case GameStop, a US video game retailer.
While this obviously has huge ramifications for the investment community and government regulators, it also forces listed companies to reexamine exactly who, how and where they focus their future communications strategies.
Publicly listed companies have dedicated investment relations and communications professionals to ensure its investors, and its stakeholders are informed about developments that may impact investment decisions.
Traditionally investor relations and communications strategies have sought direct contact with institutional investors, which due to their large purchasing power have had significant influence on stock movements.
Analysts and financial media, whose commentary can influence broader investment trends have also been key targets.
Individual retail investors disparate in nature have relatively little impact on share prices, and so received a proportionate amount of attention from company’s investor relations and communications professionals.
Companies are now being forced to reexamine their priorities now that digital platforms such as Reddit and Robinhood have been harnessed to collectivise and empower individual traders.
Conventional communications techniques, such as investor briefings, market statements, press releases and AGMs, are unlikely to cut through to this new target audience.
While WallStreetBets has collectivised traders, it has no formal structure and centralised contact points, and contains a broad range of sentiments; with the group’s dynamics malleable, fast changing and unpredictable.
WallStreetBets has its own lingo with terms such as ‘stonks,’ ‘’diamond hands’ and tendies.
While the unique contrarian culture, celebrates cult redditor traders, with pseudonyms such as DeepF*****gValue.
It’s a long way from your traditional AGM or investor briefing.
With similar instances likely to occur across other financial markets and digital platforms, listed companies will need to rethink the tone, form and delivery of future communications strategies if they are to connect with new and emerging digital investment collectives.