Investor Relations for the Rest of Us: Engaging with Retail Investors

Abstract

Using a Fintech platform (SAY) that crowdsources questions from retail investors for earnings calls, we explore retail investors' information demand and investigate whether responding to such demand increases retail interest. Through topic modeling analysis, we find that retail investors have different information needs from analysts. In particular, retail investors have greater enquiries on dividend policy, stakeholders, and product and technology, while analysts focus on financial performance and macroeconomic condition. Managers address retail investors' information demand by answering top-voted questions and adjusting their earnings call presentations. Retail interest, measured by the intensity of Reddit posts, rises post-SAY adoption, especially when firms are more responsive to retail queries. Overall, our study suggests that understanding and responding to retail investors' unique information demand serve as effective investor relations activities that enhance interest from retail investors.