“Most social media are perfectly suitable methods for communicating with investors (…)”
But there is a but.
“(…) but not if the access is restricted or if investors don't know that's where they need to turn to get the latest news.”
In short, if companies use social media to disseminate information, everyone must have access to those social media and everyone must also know through which social media the company disseminates its information.
Photos of your children
What does this mean for Netflix? Could CEO Hastings now announce via Facebook that Netflix subscribers had streamed one billion hours last month?
Not really. First, investors were never told that Netflix was using the CEO’s Facebook page to disseminate company information. And then the SEC makes an important point in its press release about employee personal websites. According to the SEC, these are not suitable for disseminating company information.
“(…) disclosure of material, nonpublic information on the personal social media site list to data of an individual corporate officer — without advance notice to investors that the site may be used for this purpose — is unlikely to qualify as an acceptable method of disclosure under the securities laws. Personal social media sites of individuals employed by a public company would not ordinarily be assumed to be channels through which the company would disclose material corporate information.”
So, between photos of your children, shared articles and all your likes, SEC does not expect posts with company information from the company you work for.
Netflix Response
CEO Hastings kept a low profile on Facebook following the SEC ruling, limiting himself to sharing an article.
Press release is not dead
A journalist from Forbes already stated that there is still a difference between what the SEC says and what it does .
“While the SEC seems intent on entering the 21st century, if at a belated pace, it still took the regulators about 20 minutes to tweet a press release about the regulatory update. So much for simultaneous disclosure.”
You see, the press release as the first source of information is not dead yet. At least not with the American stock market watchdog.