Amid Retail Trading Frenzy, Companies Focus on Small Shareholders

Amid Retail Trading Frenzy, Companies Focus on Small Shareholders

The increases in small, retail investors have some companies looking for new ways to engage with their new shareholders, according to a recent article in The Wall Street Journal.

“The retail mania is prompting companies to get a better understanding of their shareholders and how they can connect with them,” the article says, adding, “They are reaching out to individual investors through special events, podcasts, social-media channels and charts, while also keeping the lines of communication open for institutional investors.”

The article quotes Kimberly Esterkin, a managing director at Addo Investor Relations, who said she is advising her clients to engage with retail shareholders: “You’ve got to be willing to take their questions; you’ve got to be responsive.” She notes that for some of her clients, as much as 50% of daily trading volume is driven by individual investors.

The article notes that individual investors can sometimes be less knowledgeable about a company or the risks inherent in the stock market, making it necessary for investor relations teams to provide educational materials and adjust marketing strategies to communicate with these groups.

Qualcomm finance chief Akash Palkhiwala says his firm is actively communicating with its shareholders. In addition to conventional means such as earnings events and press coverage, he notes, “social media is another way to get to retail investors,” adding that Qualcomm is using Twitter to share results with shareholders.