That has prompted a strategy adjustment. In addition to spending time communicating with analysts whose “buy” or “sell” ratings on the stock can move its price, Mr. Schreiber said, he has made a point of doing interviews on podcasts, websites and YouTube programs popular with retail investors.
“I think that they are, today, far more influential on, and command far more following in terms of stock buying or selling power than the mighty Goldman Sachs does,” Mr. Schreiber said. “And we’ve seen that in our own stock.”
Academic research suggests that over the longer term, it can be a competitive advantage for a company to have a patient base of investors who understand and believe in its strategy. Such a steady foundation makes it possible for executives to focus on longer-term strategic goals, rather than meeting the short-term metrics often dictated by Wall Street analysts, said Mr. Cunningham of George Washington University Law School.
Take Amazon. Its share price kept rising over the years, despite its skimpy and unpredictable profits and widespread skepticism from Wall Street. The individual shareholders who held Amazon stock bought into the vision of the founder, Jeff Bezos, and saw no problem with Amazon recycling its enormous cash flows back into the company rather than paying dividends. Many of those shareholders are now rich; someone who bought $1,000 worth of Amazon shares at the start of 2000 would be sitting on more than $4.3 million today.
Shares of Tesla, too, have exploded in recent years — a victory for its base of cultish followers, who believed in the company’s prospects despite years of losses. Over the past five years, Tesla shares have gained more than 1,300 percent, creating $640 billion in market wealth.
While some companies are pursuing the loyalty of small shareholders, others are pursuing their money. Several companies whose stocks climbed during January’s “meme stock” boom have taken advantage of the demand to issue new shares, turning trading enthusiasm into actual cash for the company. (Previously issued shares that are bought and sold in the open market don’t generate any new money for companies themselves.)