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StockTwits Versus Twitter

StockTwits Versus Twitter

Even IROs who affirmatively decide to embrace social media find that they face a bewildering number of branches on a decision tree.

To the frustration of many IR professionals, there’s not even a single, accepted way to tweet. Although most people who tweet are referring to the 140 character messages communicated on Twitter, in the IR world, there’s a possibility that these messages are being conveyed on StockTwits, a financial communications platform founded in 2008 by long-time investor Howard Lindzon. StockTwits largely mirrors the rules of Twitter but distinguishes itself by placing a dollar sign in front of ticker symbols to organize streams of information about stocks and markets.

Weighing the Options

Within the past few weeks, the financial media has been consumed with news of the Twitter IPO. For IROs, though, the true question might be whether to select StockTwits or Twitter when launching a social media strategy.

One clear difference is the user numbers. StockTwits has said that it has over 300,000 active users, while Twitter reports 218.3 million average monthly active users in the three months ending June 30, 2013.  Twitter has described this as a 44% annual increase given that it had 151.4 million average monthly active users in the three months ending June 30, 2012.

From the numbers alone, the choice seems straightforward.  Given that IROs are using social media to communicate with a broad swath of investors, why not go to the communications outlet that clearly has the largest number of users?

But for an IRO, the user numbers may not be particularly relevant. What matters is the number of users interested in investing. And most – if not all – of the StockTwits audience falls into this camp.

Some argue that StockTwits has clear advantages over Twitter because it has tailored its offering to IR professionals (and, in fact, 200-plus public companies use the StockTwits Enterprise IR dashboard). IROs can get the dashboard for free, although there are additional features available to those who pay for an Enterprise account.

Even if you (reasonably) decide that user numbers shouldn’t make much of a difference given that StockTwits users are clearly a critical audience to reach, there’s sound evidence that most IROs favor Twitter over StockTwits. Both social media tools made the top five list in NIRI’s 2013 “Social Media Use in Investor Relations” survey, but Twitter came out ahead with 72% of respondents saying that this was a tool they used, compared to only 25% for StockTwits.

Finally, some experts believe that IROs shouldn’t see Twitter and StockTwits as rival alternatives because in many senses the choice is meaningless.

Although  StockTwits and Twitter appear very similar, for many IROs, the choice will ultimately boil down to comfort levels. Some IROs prefer tried-and-true social media tools with impressive audience numbers. Others would rather make their mark on a platform that attracts fewer teenagers and movie stars but instead caters to a sophisticated financial audience. Given the crossover between Twitter and StockTwits, either platform has plenty to offer.

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