Retailing giant Wal-Mart has taken a new tack in communicating with investors by proactively posting a message from its CFO on the Seeking Alpha website.
Two weeks after its annual investor meeting in mid-October, Wal-Mart CFO Charles Holley posted an 850-word message summarizing the company’s plans to cut selling, general and administrative expenses (SG&A) and where the savings will be deployed within the company.
Seeking Alpha offered a ‘good opportunity’ for the CFO to reinforce his key messages with investors, says Carol Schumacher, Wal-Mart’s vice president of IR.
The company had previously issued a press release and webcast of the day-long event, held at Wal-Mart’s Bentonville, Arkansas headquarters.
‘Social media are not new to Wal-Mart,’ Schumacher says, describing the retailer as ‘very aggressive in embracing digital media for communication to our customer’.
Explaining the foray into the investor site, Schumacher observes: ‘We just thought it was the right time to try it out.’
The Wal-Mart IRO acknowledges that proactively posting a message from its CFO on an investment blog site generated internal resistance.
‘You still have some challenges from a legal standpoint. Obviously we did our homework and got the approval to try it out.’
While Schumacher says she periodically monitors comments on Seeking Alpha, she has not been surprised by the three dozen comments – some favourable, some not – posted following Holley’s note.
She describes them as ‘similar to comment we hear on a regular basis’.
Wal-Mart is still evaluating the experience and has not decided whether it will repeat it, she adds.
‘Most large companies are ambivalent about social networks and web 2.0 sites like Seeking Alpha,’ says the website’s founder David Jackson.
‘On the one hand, they realise that Seeking Alpha significantly influences (and reflects) investor sentiment, so they monitor us carefully.
‘On the other hand, they’ve been slow to embrace social media for IR due to the risks of engaging in a framework that they cannot control.’
First proactive post on Seeking Alpha
Last December, Netflix CEO Reed Hastings posted a response on Jackson’s site, disputing the short case made by a hedge fund manager.
However, this case is different, Jackson says, because ‘Wal-Mart decided to publish an article on Seeking Alpha proactively, not in response to another article’.
Jackson asserts Seeking Alpha is influential with both its buy side and sell side readers. He says the site boasts over 4,000 contributors and is widely read by opinion-makers in finance, including financial journalists.
‘It’s hard for a company to reach this audience in any other way,’ Jackson says. ‘Most other financial sites focus on news and don’t publish this sort of ‘guest article’.’
[Article by Brad Allen, Inside Investor Relations]