Public Companies: The Investors You're Targeting Aren’t Listening
A shrinking set of institutional investors remain "influenceable," while the number of retail investors continues to grow.
The rise of passive investing and algo trading has radically reshaped public equity markets, specifically who is “influenceable.” With nearly 60% of U.S. equity assets now managed through ETFs, index funds, and target date retirement plans (Morningstar), and with algorithmic and quantitative trading firms driving most daily volume, the portion of the market that actually responds to corporate storytelling and investor engagement is shrinking. According to Apollo’s 2024 report, these shifts have reduced market liquidity, increased volatility, and created concentration around mega-cap names. What's left is a smaller pool of influenceable capital — and retail investors now make up the largest and most dynamic part of that group. While some institutional investors remain discretionary - think hedge funds, active managers, and family offices - their influence is no longer dominant. Retail investors, by contrast, are growing, reactive, and increasingly capable of shaping stock momentum and index inclusion. For companies seeking to drive valuation and sentiment, the strategy is clear: stop marketing to the immovable majority, and start engaging the individual investors who collectively can move markets.
Why: Retail Sentiment Has Outsize Impact in a Momentum-Driven Market
Apollo’s report shows that as passive and rules-based strategies dominate, market price elasticity decreases — meaning fewer investors are buying or selling based on changes in company fundamentals. In this environment, the marginal decision-maker — the investor who still responds to perception — has disproportionate influence.
That marginal investor is often retail.
Retail investors react in real time to news, sentiment, and social engagement. They discuss tickers on Reddit, watch CEO interviews on YouTube, and act within minutes. When they buy with conviction, price and volume rise — drawing in quant funds chasing momentum. When they exit, the effect reverses.
In a momentum driven market, it’s about narrative velocity. When retail builds a story around a stock — driven by belief in the product, leadership, or vision — they create organic demand that institutional algos often end up chasing.
These dynamics can influence:
Stock price momentum, which triggers algorithmic interest.
ETF and index fund inclusion, especially in momentum or sectoral indexes.
Sell-side and media attention, amplifying visibility beyond company control.
How: Rethinking Engagement in a Non-Narrative Market
If most of the market doesn’t care about your story, what’s the value in pitching them? Investor relations strategies must now focus on the part of the market that still listens — and acts.
This starts with measurement. Companies need to understand how retail investors feel about their stock — what’s being said on message boards, how sentiment changes after earnings, and which narratives are resonating. Apollo highlights that traditional passive flows may distort price signals — so ignoring sentiment data means flying blind.
At Stakeholder Labs, we’re helping our clients close this gap. By monitoring retail investor behavior and engagement across platforms like Reddit, X, and online forums, companies can get a real-time read on retail sentiment — and act on it.
Next, companies must scale their retail communication. That doesn’t mean jumping on every meme trend, but it does mean using channels retail investors trust: direct Q&As, new media, retail-friendly earnings formats, transparent updates, and social media.
According to IR Impact’s investor playbook, most IR teams still focus their efforts on traditional outreach methods — like earnings calls and investor conferences — even as digital-native investors (both institutional & retail) increasingly consume information through social media, video content, and interactive formats.
How: Public Companies Must Shift to Sentiment-Driven Engagement
Most IR teams still focus heavily on institutional conferences, earnings calls, and sell-side coverage — engaging capital that is either passive or pre-programmed. It’s time to shift those efforts toward capital that is still influenceable.
Start with measurement. Track what retail investors are saying on Reddit, X, and investor forums. Understand not just what they own — but how they feel about it. Apollo’s paper warns that passive flows distort price signals; retail sentiment helps you re-center on perception-based data that actually reflects market momentum.
Then build for scale:
Open up investor communication to interactive formats — Q&As, social media, and video podcasts.
Simplify your content — earnings calls, press releases, and decks should be comprehensible to non-CFAs.
Target investor communities — platforms like X, Reddit, Stocktwits, YouTube, and Youtube interpret and translate information for their audiences.
Use tools from Stakeholder Labs to aggregate investor sentiment data and connect with the retail investors directly.
Influence Is a Scarce Resource — Spend It Where It Works
The public equity market isn’t vanishing — but its responsiveness is. Passive and quant flows have won the volume war. But retail — and a handful of agile institutional players — still carry the power of discretion. They’re the ones who decide to believe your story. They’re the ones who talk, buy, and influence momentum.
Apollo’s data confirms the structural shift: influence is shrinking. But where it remains, it’s potent. Companies that stop pitching to immovable capital and start engaging influenceable investors — especially retail — will see the returns in visibility, momentum, and ultimately, valuation.
Stakeholder Labs
Stakeholder Labs empowers public companies to identify and directly engage the next generation of investors — retail and active institutional alike. We turn sentiment data into action, and action into long-term investor engagement. Ready to shift your strategy toward investors who still make decisions?