How to find young shareholders on Second Life

ArcelorMittal is quite some company. It is the world's largest steelmaker. Lakshmi N. Mittal, the Indian London-based billionaire industrialist as Wikipedia says, acquired and merged steel companies all over the world, until now with great success. However, there is a point of concern: who wants to be shareholder of the company? Young people are not interested, so it seems. Can the company seduce them using Second Life?

The company has its share of institutional shareholders (like investment funds, banks, insurance companies). Companies do also want to have individual retail shareholders, say people like you and me, who often help to stabilize the performances on the stock exchange. It is regarding the individual retail shareholders that the company seems to be confronted with some challenges.

Steel companies are not sexy and Lakshmi, though very dynamic and ambitious, is no Steve Jobs. Visit the Shareholders Meetings of ArcelorMittal and things become even more obvious: the shareholders of the company are elderly citizens, on average they are older than 65, so investor relations manager Julien Onillon of ArcelorMittal told me.

ArcelorMittal is a global company, but it is headquartered in tiny Luxembourg, though the operations are actually managed in London. The stock is listed on six stock exchanges: New York, Amsterdam, Paris, Brussels, Luxembourg and on the Spanish stock exchanges (Amsterdam, Paris, Brussel and New York being NYSE-Euronext). However, this is not yet international enough for ArcelorMittal:

if you are in Japan, Australia or India and you are an invidual investor it is very difficult and costly to buy our share.

So at least three challenges need to be tackled:

• to interest younger people to become shareholders.
• to communicate effectively and worldwide with shareholders and potential shareholders, with employees and potential employees, to make it clear for instance that innovation is crucial for the steel industry.
• to provide a platform where people can easily buy and sell shares of the company, wherever in the world they are.

ArcelorMittal works on these issues in innovative ways. The company produces interesting podcasts and Web TV. In order to have real dialogue with shareholders, more is needed. That "more" could be virtual environments.

On June 17 the company organized a shareholder dialogue in Luxemburg. ArcelorMittal did not limit itself to the traditional boring formal shareholder meetings, but gave shareholders the possibility to ask questions to the leaders of the company. The event was put on video and streamed into the virtual buildings of the company in Second Life. The avatars would have the possibility to enter into the dialogue as well.

Why Second Life? I talked to the people organizing the mixed reality event, the investor relation specialists of ArcelorMittal and also people working for communication companies working for the steel company. The reasons they wanted Second Life were:

• It is the virtual world which is best known by the audience at large. At least, people have heard about it.
• The demographics of Second Life: it is a world for grownups. Worlds for teens and kids may have huge success, but the company is looking for potential shareholders. Even though the residents are no teens or kids, they are young (32 on average I heard), at least younger than the current shareholders.
• It is relatively easy to create content in Second Life, and the huge community of developers and builders means that prices are low. It is relatively easy to integrate streaming video and audio, important if one wants to organize effective communication in a business-like setting.

Now how did it work out? Investor relations manager Julien Onillon summarized:

The concept is clearly a success. Now we do know what we can do in Second Life and also what the limitations are.

About 70 avatars gathered on the ArcelorMittal island. On a virtual video screen they saw, as planned, how chairman Mittal talked to individual retail-shareholders in real life (Luxembourg). The avatars than could ask questions themselves and communicated with ArcelorMittal managers on the virtual screen.

Onillon was very satisfied that a real dialogue was realized between retail-shareholders or at least interested people wherever on the planet they were and the management. However, ArcelorMittal also realized that a mass event in Second Life is technically not possible. Of course, one could have a central place to gather the participants, and work with virtual screens in other locations in Second Life. For a shareholders meeting with a lot of newbies, this would be very hard to manage. Even now two auditoriums were used, and in the second (smaller) auditorium I witnessed how newbie-attendees struggled with the interface.

Onillon is convinced that his company has to explore further the possibilities of virtual meetings. For instance, when the quarterly resultats are announced, it would be possible to organize special events for individual retail-shareholders in Second Life. These gatherings would be more like club events, not mass gatherings. Onillon said that his company will continue to study the technical possibilities for virtual meetings.

The investor relations people of ArcelorMittal have even more audacious projects. Remember, the third issue at stake was the search for a platform where people could easily invest in the shares of the company. Onillon confirmed that ArcelorMittal is studying the possiblities of selling shares in Second Life.

It can be imagined that the company allows to buy certificates in Linden dollar, and a broker would get an order to buy real (existing) shares at the same time on the NYSE. Onillon could not give a precise timetable for this, but “it could work in a year’s time.”

The regulatory issues could be relatively simple because by buying shares through Second Life what would happen is that you buy shares on a regulated market (the NYSE). However, ArcelorMittal says that more work on this project is needed.

First we need to have the right partners. A broker from an investment bank and potentially work with the NYSE-Euronext stock-exchange. We also need to create a a technological platform to pass the orders.

It seems that some European companies at least are discovering Second Life as a platform where they can experiment with virtual collaboration and communication. There is the feeling the possibilities are impressive, but there are also some important limitations, at least for now: the fact that there is a (steep) learning curve for the interface and also the fact that mass gatherings are difficult or impossible to organize.

Roland Legrand (in Second Life: Olando7 Decosta).