Dell goes back to Twitter monologue for Q4 results
Dell ditched the Q&A from its quarterly Twitter session on Tuesday due to regulations surrounding the company’s potential go-private sale.
The company started out using social media some years back simply to ‘get some messages across’, says David Mehok, executive director of IR, but following suggestions from online followers, this evolved into a two-way communication.
‘One of the things we typically do is solicit questions at the beginning of the quarter,’ he explains. ‘This quarter was different: because of the pending transaction, we could not do the question part but we still had the one-way communication.’
Dell’s board approved a $24.4 bn buyout of the company on February 5 that would see founder Michael Dell and private equity firm Silver Lake take the company private. The $13.65 share price offered in the deal has been publicly opposed by a number of large investors, however.
Following what could be the company’s final financial results after a 25-year NASDAQ listing, Mehok explains how social media has helped the firm’s IR program. ‘It brings you an air of credibility,’ he says, though he admits that social media channels, such as StockTwits, are utilized far more by retail investors.
‘The institutional side gets all their questions addressed through the conference call and the individual call backs we have,’ he says. ‘Obviously we can’t do individual call backs to all the one-off investors out there, so this is one way to try to address that.’
In terms of technology, Mehok says that Dell’s institutional investors ‘access our blog fairly frequently, but they won’t use StockTwits’. Instead, social media are more a means for the company to communicate with retail investors who make up anywhere from 10 percent-15 percent of Dell’s shareholder base at a given time.
Social media can be tricky for IROs, though, especially in the US where tight regulations have to be considered at all times, says Mehok, citing the Facebook post that saw the SEC consider civil action against Netflix last year.
‘Just because you're utilizing social media doesn’t mean that all bets are off in regards to things like Reg FD,’ he says. ‘We are always very careful and calculated in terms of the answers that we provide and there’s a check mechanism that ensures anything we respond with on social media is already in the public domain and/or is not material in nature – and will not result in the common investor making an investment decision based upon that information.’
Jason Thomas, IR analyst at Dell, expands on that process, explaining that all tweets are checked by the finance team ‘to make sure they are 100 percent accurate, with no fat finger issues,’ followed by a review from the legal team and finally the IR department to ‘make sure we’re communicating the same things to all investors.’
While these issues might make social media seem somewhat tedious for IR, Mehok says they are really ‘very effective’.
Dell’s IR team is taking a pensive approach to the evolution of investor communications – despite the pending go-private plans. ‘We’re constantly trying to determine the next step,’ concludes Mehok. ‘Should we be utilizing Facebook? Should we be utilizing LinkedIn? And if so, how? There are a lot of different things that we’re considering, and we think about them in a very methodical and thoughtful way.’