on stocks via online investment platforms or apps, followed by 58% via financial news media, and 39% via financial creators (newsletters or social media). Reddit comes in fourth at 24%. “What we’ve seen is that from the retail investor revolution
has come a retail investor evolution,” says Katie Perry, General Manager of Investor Relations at
Public.com. “Now 63% of our investors say they are more plugged into fundamental analysis, company news, earnings, and market news than they were a year ago. More than half are diversifying their portfolios following volatility in 2022. A majority of people whose first investment was a meme stock or cryptocurrency went on to diversify. Tere are more entry points to the market than ever before.” More entry points means more information is being shared. In
other words, according to Matt Joanou, CEO and Co-Founder of Stakeholder Labs, there’s been a “democratization of access to the capital markets that is now coming in the form of communities.” As more retail communities form and get involved in public
companies, Stakeholder Labs has found that the retail sentiment starts to impact the institutional sentiment—they are intercon- nected with “the small bucket now influencing the big bucket,” Joanou concludes. Retail investors can have a positive force. Tey are proliferating on social media, and according to a recent Stakeholder Labs report, the top two influences social media has brought to retail investing center around education. Social and online platforms are viewed by many as being im-
portant—even transformative—sources of education for today’s retail investor. Nathan Rodland, General Partner in venture capital firm Elefund, an investor in Stakeholder Labs, and Co-Founder of Robinhood, explains, “Since founding Robinhood as the COO, I’ve operated with the fundamental belief that increasing digital access to our financial markets is one of the greatest opportunities of our lifetime. We see the responsibilities of the investor rela- tions officer rapidly evolving as the financial markets continue to digitize. An entirely new set of tools is needed to manage and grow retail investor communities.”
A New Retail Investor Toolbox for Investor Relations Officers Let’s take a moment to summarize some key points: 1. Retail investors are not retail traders – they are generally long- term holders who believe in the value companies create and are investing for a goal such as retirement. 2. Retail investors are influential; they are opening more broker- age accounts than ever before and accounting for a sizable portion of daily equity trading volumes that are in some cases competing with volumes traded by mutual funds and hedge funds.
niri.org/ irupdate IR UPDAT E ■ SPRING 2 0 2 3 2 3
“It is important for companies to be out there controlling their messaging and their narrative because the memes and Reddit rooms like
WallStreetBets are out there without checks and balances.” Nicole Maselli, Head of Sales, StockPerks
“If 2020 really was the ‘rise of the retail investor,’ then 2022 could arguably be described as their initiation test, with almost every major financial asset on the planet performing
dismally...Yet after four quarters of bear territory representing the worst year for markets since the 2008 financial crisis, remarkably, most retail investors are still feeling optimistic.” Ben Laidler, Global Market Strategist, eToro
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