Big institutional investors not only “like” social media stocks like Facebook, LinkedIn and Twitter, they say information gleaned from those sites is shaping their investment decisions.
As USA Today reports, that means Facebook “likes” or the content of a Twitter news feed is now viewed as a “key source of information” and can determine where billions of investment dollars are parked, just as new information made public in more traditional media like newspapers and broadcast and cable TV has moved markets for decades.
“Almost 80% of institutional investors use social media as part of their regular work flow, and approximately 30% say the information consumed via social media has directly influenced an investment decision,” Greenwich Associates says in a report released today titled “Institutional Investing in the Digital Age: How Social Media Informs and Shapes the Investing Process.” The report includes input from 256 corporate and public pension funds, insurance companies, endowments and foundations in the U.S., Europe and Asia. Among the key findings: 48% of the investors say information from social media prompted them to do additional research on an industry issue or topic; 34% say information learned on social media influenced a decision to work with a particular client or company; and 33% say information obtained there triggered a discussion with their investment consultant.
“These results show that social media is influencing decisions that can result in the allocations of billions of investment dollars around the world,” says study author Can Connell, head of market structure and technology at Greenwich Associates. “With approximately 40% of the institutions globally expecting to increase their use of social media in the coming year, we’re projecting a further, rapid increase of social media influence in institutional investment markets.”
