What Trump's quarterly earnings shakeup could mean for investor relations
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President Trump's push for companies to report earnings semiannually instead of quarterly could force companies to rethink strategies for engaging retail investors.
Why it matters: Retail traders lack the access to corporate leadership that institutional investors historically enjoy. Fewer earnings reports could make it harder for investor relations teams to keep the retail crowd engaged.
What they're saying: Retail shareholders are more likely to buy and hold, even amid downturns, "when they feel connected to a brand. ... But issuers need to stay in frequent touch with those investors, managing their expectations, in order to earn that loyalty and trust," Townsend Belisle, CEO of Haystack Needle, tells Axios.
- "You're not going to see an across-the-board reaction," says Erik Gerding, former director of corporate finance at the SEC and partner at Freshfields.
- The pressure on investor relations teams to attract retail investors will likely correlate with the size of their retail shareholder base.
Situational awareness: The proposed changes come as retail investors have become more formidable market participants.
- Robinhood just launched a social platform within its app intended for retail investors to monitor earnings calls and reports.
- Nearly half of the top 10 performing stocks year-to-date are retail darlings that have seen fairly consistent inflows from novice traders.
- Companies and banks are making IPOs increasingly accessible to retail investors, which make up a quarter of trading volume overall.
Between the lines: Shifting to semiannual earnings doesn't mean companies will only communicate with investors twice a year, says Kelly Sullivan, a partner at the communications firm Joele Frank.
- "Very few companies will want to limit themselves to what is required when there is an opportunity to have a best-in-class investor program that is specifically tailored to the company's calendar and shareholder base," Sullivan tells Axios.
The big picture: Companies have been testing new channels to communicate with investors in a more retail-friendly way — through vertical videos, infographics and across platforms like LinkedIn or X.
- During an appearance on the tech podcast "TBPN," Lyft CEO David Risher said he's interested in delivering earnings in the form of a podcast.
- "If I ever convince my [IR team] to do that ... maybe we'll get you guys to host it," he said to hosts John Coogan and Jordi Hays.
Yes, but: Institutional investors could end up with more access to corporations between half-year earnings, putting the retail investors behind just as they were catching up.
- "The game is being changed to help put them at another disadvantage that they didn't have before," Tom Bruni, editor in chief of Stocktwits, a social media platform for retail traders, tells Axios.
What we're watching: Will companies feel pressured to engage the retail crowd for fear of losing them?
- Or will they continue to operate on a quarterly earnings schedule, even if just for internal purposes? Several corporate communicators Axios spoke to say these quarterly earnings served as an accountability mechanism across their organizations.
- Perhaps they will relish having only half the number of quarterly earnings calls to prep for.
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