A recent study out of the University of Michigan found that by using Twitter smaller companies with less media visibility and analyst coverage can reach a wider investor audience and increase their share liquidity. The study looked at a sample of technology firms identified as active users of Twitter and found that tweets disseminating hyperlinks to company-initiated information, such as press releases, can lead to lower bid-ask spreads and greater market depth.
Twitter is a free service to join for both firms and investors, so establishing the channel is relatively costless. The biggest hurdle we see is getting investors to follow the firm on Twitter … As technologies like Twitter grow, this hurdle should become less of an issue. Fortunately, we’re seeing Twitter usage grow at an unbelievable rate. For example, in 2007, there were roughly 400,000 tweets posted per quarter. In comparison, there were 4 billion tweets posted in the first quarter of 2010, which is quite impressive!
Are you using Twitter or other forms of social media to communicate with your investors? Do you have a strategy in place? If not, you’re not alone, according to this June 2010 survey by Digital Brand Expressions only 41% of responding companies had a strategic plan for social media. If you are using social media, what’s working/not working for you?