Critical External Factors
We live in a time when an off-handed tweet by a “celebrity,” rather than a professional analyst, can drive down the market capitalization of a company (e.g., the recent controversy over the impact of an influencer’s comment on a Snapchat user experience change).
Today stock prices are dictated by much more than fundamentals and traditional valuation methods.
When your stock price is hammered by an influencer — that’s what they’re called and what they actually are — it can be as powerful as a Wall Street analyst’s data-backed assessment.
An influencer can directly affect customer demand through postings on social media and beyond; increasingly successful influencers are showing up in traditional mass media.
If influencers disparage you to their often social media base, typical corporate responses simply won’t matter.
Marketers chase influencers (again, typically on social media) for their power to advocate products and services to their followers. Think of it as the digital version of brands emblazoned on professional athletes’ clothes or on NASCAR cars.
Yet influencers are the same people that, should they disparage you, can cause a situation that can cost you revenue, growth, and now stock value.
It’s a situation that will become more common as influencers recognize their power to exercise free speech. They can do more than just sell: they can negatively comment on anything and anyone.
Questions to ask:
To lead and succeed through this kind of storm, consider these example questions about the influencers affecting your company:
- First, are the influencer’s comments actually correct and should we address the problem cited?
- Did they get their facts wrong?
- Is it worth it — or safe — to connect with the influencers to change their opinion?
- Are they trustworthy?
- Do they feel maligned and are exacting revenge?
- Are they trying to get something from us?
- Were they paid, coerced or influenced by another party — perhaps a competitor?
- Would it be better to just let the matter pass?
- Would it better to just respond to Wall Street with the truth about the company?
- Is it worth appealing to the influencer’s audience — or would they respond angrily?
- Is responding to the influencer only further empowering them?
- Did they commit slander or libel at a level that is truly damaging?
- Should we educate the audience on the subject without specifically mentioning the influencer?
- Is it worth a press release or does it just validate the influencer?
- Can we resolve the issue with the influencer, and issue a joint press release? Or again, does that validate the influencer?
- Is the influencer pushing a competitor’s products?
- If the stock market responded by pounding the stock, is there more going on than just the influencer and their followers?
- Is there another source that’s instigating the stock value reduction — i.e., a false flag?
- Don’t panic. That is the facilitator of failure.
- This is new territory for everyone.
- Involve your social media group, but you must involve others as this is a top-level company issue, not just a marketing issue.
- Your influencer is not likely a professional with PR training and experience, and shouldn’t be expected to act or react like one.
- Most influencers are in it for the money or fame, or likely both.
- Your influencer is permitted their free speech, but subject to libel and slander issues.
- Your influencer may not be an adult.
- Your influencer may not be in the same country as you operate.
- Your influencer may be anonymous.
- Unlike the majority of influencers and aspiring influencers who receive payments for promotion, a minority of influencers are frauds — paid company or political shills.
- If you approach this incorrectly, the influencer can and will use everything say and do against you publicly. That will likely exacerbate the situation.
- Consult your legal advisors before taking action.
- Look at the responses posted on social media by the influencer’s followers. The smart investment community will be watching them too.
- Advise your Board quickly of what is happening, and how you intend to address it.
- Don’t underestimate influencers’ power to affect your top and bottom lines, and your stock price.
This is just a sample of the issues involved and considerations for addressing them.
If you face a such a situation and would like to learn more about solutions, please contact us.