When a smiley face is worth a thousand words – and maybe a million dollars

A recent US securities suit against “activist investor” Ryan Cohen, in part because of a Tweet/X containing an emoji, highlights the inherent risks of using emoji in business communications.

Responding to a gloomy article predicting the downfall of Bed Bath & Beyond Limited shares, Cohen tweeted a celestial wink, the smiling moon emoji, and captioned it, “at least her cart is full”.

Investors took this as a bullish signal, sending BBBL's share price skyrocketing from $10.63 to almost $30 in a mere four days.

The digital "to the moon!" signal is well-known among online investors as an indicator of stock confidence. When Cohen cashed out for an alleged windfall of $68 million investors cried foul, suspecting manipulative intent behind the cheery emoji.

For his part, Mr Cohen argues that the meaning behind the emoji is ambiguous and immaterial, and was not intended to impact BBBL’s share price.

We have yet to see where this lands but one observation by the judge in this case is quite instructive: “A fraudster may not escape liability simply because he used an emoji”.

Another recent example of an emoji gone wrong arose in a Canadian dispute involving a contract for the sale of flax. The court looked at whether a thumbs-up emoji was sufficient to approve the terms of a contract. It was, but the surrounding context was important. The farmer and the supplier at the centre of the dispute had regularly corresponded via text message, and the farmer had previously accepted terms via text, albeit with words not emoji.

No similar disputes appear to have made their way to the New Zealand courts, but it’s not unreasonable to expect that they could. A securities fraud case seems quite a remote likelihood, but in broader contexts, use of an emoji may potentially provide an actionable cause of action — in defamation proceedings, for example, or contractual disputes.

Leaving aside questions of professionalism, which are largely determined by the context, the key dangers of using emoji in business settings will likely arise out of interpretation issues.

Emoji are subjective in nature. Using them in a contract setting is likely to lead to ambiguity, and possibly misinterpretation. Ambiguity is, of course, never desirable in your contractual arrangements.

Emoji can also change the tone and context of a message. They may be used to convey a message which is contrary to the accompanying words, such as by adding a laughing emoji to an otherwise serious statement. This can have tricky consequences in an employment situation and even render a message defamatory in nature.

As modes of business communication continue to evolve, effective communication remains key. It’s important to bear in mind that when used in the wrong situations, seemingly innocuous and light hearted emojis might end up being the most costly keystrokes you can make.