Digital Investor Relations and the Contribution to fair valuation

Abstract

Through history, crises and financial scandals occurred. The financial community stepped in to provide an explanation; the behavioral finance club always defends the idea that markets are not efficient. On the other side, another squad defends rigorously the theory that the price incorporates all the information, which means that the market is never wrong. Another club stepped in as well, to provide an illustration about the firm’s theory and the relationship between the management and the investors.  These theories could only lead the financial community to establish and adopt a communication channel known as the Investor Relations; the French refers to it as “Financial Communication”, different names for one objective; to smooth the flow of information, which should eradicate the information asymmetry and resolve the agency problems. The quality of the information would make the Investor Relations program more effective, for that reason the call to integrate the digital technologies is an obligation. In this paper, we are going to expose first the efficient market hypothesis, the firm’s theory and the emergence of the financial behavior, only to provide a definition of the concept “Digital Investor Relations”, and how does it affect the stock price performance.