Stefan Cheplick

@scheplick

Elon Musk, Twitter, and What It Means For Future Investors

The whole game has changed.

I remember talking about the stock market with my grandfather. He would tell me things about reading quarterly reports or potentially seeing the names of the stocks he owned in the newspaper. If you wanted information about a company, you had to wait.

Imagine trying to explain this to a young investor today:

“Sorry, you can’t read about your stock or its earnings right now. But in two weeks, I’ll use the United States Postal Service to mail you a report about the latest quarter.”

An entire generation of American investors once lived like that. All of the information they got about their companies were random sightings in a newspaper, an occasional showing on TV, or a mailed report. That’s it.

I don’t think many investors could live like that that today. I also don’t think many investors really understand how easy it is to get information about any company, executive, or product. It’s all here. Somewhere on the Internet. It just takes skill, time to dig it up, and the ability to share it at scale.

I want you to think about communication. The simple act of spreading an idea or sending a message from one party to the next. It might be a news release, a product announcement, or a something else related to the company. How do founders, and leaders of a company send a message to the shareholders who own their company? Or passionate fans? Those who pay attention to these simple questions will win. Those who overlook it, will fall behind.

First, let’s talk about how things worked many years ago. Or back when my grandpa was an investor. You only had a few ways to get a message about your company to the people who were investing in it or cared about it:

  1. Newspapers and magazines
  2. Radio
  3. TV
  4. Quarterly reports

20 years ago, all of the most important messages were disseminated through institutions. You needed a national newspaper to disseminate a message, interview, and even an advertisement. Or a local radio broadcast to get a word spread across airwaves. You needed an institution to be your medium.

That game is over.

The medium is now the person. And that’s how it should be. Or it should have been like that all this time. But it took hundreds of thousands of fiber optic cables and satellites hovering above a blue marble to make it happen. Sometimes I think the Internet was invented, whether they knew it or not, as a means to give everyone a voice. The hipster techies in San Francisco might say, it democratized public conversation.

Back in 2011, a mentor of mine said to me, “As more people connect through social networks, institutional media will fade.” I think if you look around at the current landscape, you can see how that comment marinated over time. People no longer need the institution or organization. They can do it themselves.

Imagine a world where anyone can send and spread any message they want at scale across the world for a cost that equals zero dollars. That world is right in front of you. The game changer is social media. It’s still only in its early innings. A whole new line of communication has opened . It’s public, it’s free, and it’s fast. Here’s something to think about further: the latency for a single message to reach a group of people has never been lower. Meaning, at no other point in our wonderful history of mankind have people been able to send a message as fast or as far as we are able to do today.

Social media for investors and fans means the end of waiting for a signal. It’s fascinating to me how quickly people forget that just thirty years ago everyone needed a morning paper to find out what was going on around them. Think about that. Thirty years ago. Imagine how confused you would be reading this post then. Even twenty years ago.

Today, you create, build, and learn from anyone in minutes. The merit is in the message. Followers, and fans are the proof.

And that brings us to Elon Musk.

Put your opinions or emotions about Musk aside for a few more minutes. Because today, he’s giving everyone a glimpse into the future of investor communication and message dissemination. Musk controls his own message. He wields Twitter like his own TV network.

People want to hear from people. That’s true for every industry. For investors, it means they no longer want to hear from the company. They want to hear from the company’s leaders and founders. Investors of every size and interest will want this, and they will get it.

Reuters wrote a Tweet about Tesla. It’s negative, and it has potential to sway the decision-making of investors and traders:

Elon Musk responds. It’s open to the public, he defends Tesla, it’s straight from him:

Here’s Raj Mathai posting a video showing what he believes is the current state of Tesla manufacturing:

Musk responds, clarifies, and provides what he thinks is actually true about the situation:

If you’re an investor in Tesla, a fan of the electric vehicles, or someone who thinks Musk is a fraud, the conversational aspect and real-time nature of this exchange has never happened before so openly and public. Currently, only a few companies and their CEOs are doing this. But controlling your message will become more important, and more founders, CEOs, and leaders of companies will begin to act like Musk — being vocal and outspoken about what they think is right and what they think is wrong. The only other name that comes to mind right now is the CEO of T-Mobile.

The CEO of T-Mobile is John Legere, and you can find him posting daily:

In five to ten years, I believe the biggest winning companies will operate like Legere and Musk. Investors, fans, and followers will no longer want to hear from companies. They will no longer want dry, corporate or dull sounding messages spread through an institution. They will want to hear directly from them. They want color. They want voice. And they want someone with a real meaningful opinion. Those who understand this will use social media, like Twitter, to engage in free debate, and to transmit messages instantaneously.

When Musk tweets, the big bulge bracket banks, the ones with billions of dollars under management, or more than 10,000 employees, get the exact same information as me, the guy who moved to New York City a year ago, manages his own account, and lives in an apartment the size of some closets.

This is a new paradigm. People talk about how Bitcoin decentralized currencies. Or how blockchain is bringing transparency to the financial ecosystem. In my opinion, social media is right in front of us and having a far bigger impact. It’s decentralized the message, and it’s made it more free and transparent than ever. If the pen is mightier than the sword, we still have yet to fully grasp how insanely powerful this new ability is.

I hope you enjoyed reading about. I hope to expand on it further down the road. And I hope you’ll follow me on Twitter where I talk about stocks, investing, and the future of finance.

Thanks for reading! If you enjoyed it, subscribe to my email here and I’ll send you some of my other writings and notes. Make sure you’re also following me on Twitter and StockTwits. I also invite you to read some of the other posts I’ve written:

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