In two weeks, Dell’s leap into the world of Investor Relations blogging will be one year old. Birthday’s are always a good time to look back and take stock of how one has fulfilled their potential and goals. So, today, we take a look back at one year of Dellshares.
On November 1, 2007, Lynn Tyson made the first post on the Dellshares site citing the founding philosophy of Dell that direct relationships with customers were advantageous. Also noted was that credible and relevant organizations were taking advantage of technology and the Web and there was no reason IR shouldn’t either.
The post laid out the goals and hopes for the new blog from the Dell Investor Relations team. The main goal was to not just push out information, but to also give perspective, context and meaning to that information. Another goal was to be able to have a dialog with investors by answering questions.
The biggest goal of Dellshares may have been the one that got glossed over at the end of the post. Michael Dell noted that “there are conversations going on about us all the time and we want to be part of those conversations.” The Internet, for all of its potential as a useful and widely available means of distribution information, is just as powerful at spreading rumor and innuendo. In the end, Dell was hoping that by giving information straight from the source might help color those conversations that are going on all the time with at least a dusting of the company’s version of the truth.
Also noted, were the “legal obligations” that would limit what could and couldn’t be said, and even when it could be said. However, the overall goal was to provide an additional source of investor information, and hopefully an improved source as well.
While Dell’s stock price is down from 29.70 on the day Dellshares was launched to an 11.99 closing price on October 23rd, hardly anyone will be blaming the Dell blog over issues like market conditions, and the sub-prime mortgage mess in the U.S. So, in what way should we evaluate the success of Dellshares? By using the goals that Investor Relations had for Dellshares when it was launched.
Dellshares archives show 29 posts in the past year. On one hand, that seems very low. On the other hand, a company can only comment so many times on its strategy and corporate moves. Considering, those 29 posts make an average of over 2 posts per month, one could say, that as a pure number that would be a passing grade.
However, what matters is what those posts were able to accomplish. Recent posts have taken on an “Oh, by the way” tone that doesn’t seem to convey that perspective and meaning that was hoped for. The 9/16 post is less than 200 words and says that pursuant to a March 31st announcement that Dell would be evaluating its ownership of Dell Financial Services, that they had decided to keep it. The perspective and meaning is exactly what is missing from the post. Compared to more meaty posts in December 2007, such a post is a bit of a disappointment.
Other posts though continue to show the promise for this form of communication. The posts made with the release of quarterly earnings data are particularly useful for those investors who don’t want to parse the standard press release, nor listen to a full conference call. These posts give Dell a way to highlight the same information they highlight for analysts on conference calls for retail investors.
Some of the best posts are those that make a comment on strategy as previously announced. These posts give a concrete example of where the company thinks it is executing on a defined objective. For example, the August 12, 2008 post describes the roll-out of a new line of notebook computers. It reminds investors that one of the company’s five strategic priorities is notebook computers, and explains how the new line advances that goal. The great thing about a post like this, is that an investor can read the post and decide if they believe the company’s move is the right one whether in terms of size, aggressiveness, or overall utility. If the investor likes the move, it can be a reason to invest. Conversely, an investor who feels that such a move is too small, too aggressive, or even ill-thought out, can avoid investment, or look to sell their shares.
One thing that does seem to have fallen by the wayside, is the objective of answering questions from investors. Since the first two months of the launch of Dellshares, there haven’t really been any posts directed at investor sentiment or questions. One wonders if other posts are tailored in response to such questions without directly mentioning that fact. Either way, it does seem that investor participation has gone away, with many posts in the last 6 months have just one or two comments, and many having zero.
The Year Ahead
For whatever success the Dell IR blog had, it did do one very important thing. It started the dialog on the feasibility and the wisdom of using such technology in the IR space. A major well known corporation like Dell launching such a venture gives it instant credibility and the IR space in general can be thankful for that. Let’s hope in the year ahead that Dell returns to Dellshare’s roots and once again attempts to add the elusive context and meaning to information, as well as re-engaging the shareholders in the postings.
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