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DealMakers - 2020 Annual


Keyboard warriors: Shareholder activism on social media

by Johann Piek

211 minutes. That is the average daily time a person spent on social media in the first half of 20201. Exclude the recommended eight hours of sleep from the equation and social media activity accounted for a hefty 22% of the average person’s wakeful day. Social media has become a fundamental part of our daily lives, impacting both “online” and “off-line” aspects, with one such aspect being shareholder activism.

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Johann Piek

Shareholder activists are no longer waiting to voice their concerns at target company AGMs, along with the colloquially coined sausage roll brigade. They are, instead, using social media platforms such as Twitter, YouTube, LinkedIn, and Facebook to garner “real-time” support amongst disparate shareholders and launch campaigns to ultimately drive change in target companies. 


Concurrently, social media has also created a platform for inexperienced shareholders to drive their personal agendas. These investors are now empowered to make personal, ill-informed statements, which they would likely never dare make in-person at an AGM, GM or investor roadshow. This phenomenon has reared its head in South Africa and is set to pullulate going forward. 


How are shareholder activists utilising these social media platforms to get their points across?

  • They’ll start with brief messages on platforms such as Twitter and LinkedIn, usually accompanied by a catchy hashtag like #FossilBanksNoThanks[2], to inform and update a target audience of the activist’s concerns. This form of communication is prevalent and is usually the point of departure in the activist’s campaign.


  • Embedded links in the above messages are likely to follow, diverting the target audience to the activist’s website or blog (“sites”). These sites “tell the story” with videos, detailed presentations, comparative data, and the activist’s demands. These sites also cater for longer-form messaging.


  • Next up are paid advertisements on social media platforms. Tailored to specific attributes, these paid ads help to ensure that the activist’s message is “in the face” of the target audience. Twitter’s promoted accounts, tweets and trends are an efficient way for shareholder activists to capture the attention of their target audience.


Some notable examples

  • In 2007, Eric Jackson, who at the time held only 96 Yahoo! shares, wrote a blog post about his dissatisfaction with then Yahoo! CEO Terry Semel’s performance, and the need for a management shake-up. His post went viral, ultimately resulting in his leading a coalition of 100 shareholders with a combined $60m stake in the company at the AGM. Jackson and his “Plan B” campaign was largely credited as the catalyst to getting Semel to step down shortly after the AGM[3].


  • On 13 August 2013, shareholder activist Carl Icahn tweeted, “We currently have a large position in Apple. We believe the company to be extremely undervalued. Spoke to Tim Cook today. More to come”  and “Had a nice conversation with Tim Cook today. Discussed my opinion that a larger buyback should be done now. We plan to speak again shortly”. These two short tweets caused a massive surge in the Apple share price, adding US$19.9bn to the Apple market capitalisation in just 2 days[4]. On 18 May 2015, Icahn tweeted an open letter to Tim Cook, which also added US$8bn to the Apple market capitalisation[5].


  • Closer to home, shareholder activist Theo Botha, along with the RAITH Foundation and Just Share, have been spearheading the new wave of responsible investment in South Africa. Their campaigns to have climate change-related resolutions tabled and voted on at the AGMs of Sasol, FirstRand and Standard Bank have been well publicised on social media platforms, such as Twitter and LinkedIn.


  • A topic which has sparked even more outrage amongst South African shareholder activists, post the COVID-19 lockdown, has been executive remuneration and how, in many cases, it is not aligned to shareholder interests. The awarding of “COVID-19 instruments” and the amending of incentive schemes to prevent executives from moving to greener pastures is set to be the subject matter of several social media campaigns going forward.


What could companies do to prepare themselves?

  • It’s here to stay, so be pro-active and start preparing. Best practice guidelines (which would include disclosure recommendations), a comprehensive social media policy, and a dedicated team should form the foundation upon which a company’s strategy is built. Typically, the investor relations team is tasked with overseeing shareholder concerns, with serious concerns directly escalated to management. For larger companies, this can be an internal team and, for smaller companies, an outsourced specialist.


  • Once established, these teams should keep abreast of the latest activist trends and continuously monitor social media platforms to identify company-related concerns that could potentially induce a fully-fledged shareholder activism campaign.


  • Frequent “stress-tests” should also be conducted to assess whether the company has the necessary capabilities to deal with different concerns (and campaigns) in a prompt and comprehensive manner.


  • Depending on the nature of concerns which emerge on social media, companies could either pro-actively engage with shareholders on the social media platform or through more formal channels such as the Stock Exchange News Service of the JSE Limited. Companies need to remain mindful of the type of information disclosed on such platforms, and should avoid disclosing any price sensitive information (a la Netflix CEO Reed Hastings on his Facebook account[6]).


The proliferation of social media has taken shareholder activism to a new dimension. It has increased their access to information, and audience reach, exponentially. It has also created several activist “influencers” with cult-like followers. However, social media should not just be seen as a carrot in the hands of an activist. Companies, too, could leverage the information at their disposal to resolve shareholder concerns before they result in long-term damage to the brand and shareholder value destruction. Those future tweets may very well be the “canary in the coal mine” for your company. 


Piek is a Corporate Financier at PSG Capital.



  2. Fossil Banks, No Thanks! is a BankTrack-led global campaign demanding banks to stop financing the fossil fuel industry.





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