We suppose Twitter is, like, a real thing now because even companies are acknowledging it as a beneficial tool.
“The Securities and Exchange Commission gave explicit permission for companies to use social media to announce key information, so long as investors have been alerted about which sites will be used to disseminate such disclosures,” The Wall Street Journal reported this week.
That’s right: Important stock information can now be disclosed on Twitter, and it’ll count as an official announcement.
“The SEC’s report issued Tuesday confirmed that fair-disclosure regulation that requires publicly traded companies to broadly disclose material information applies to social media sites like Facebook and Twitter the same way it applies to company websites,” according to the report.
Is this the age that we’re living in now — an age that just allows a social media website with a 140-character limit make big announcements? A social media site, we might add, whose biggest accounts get hacked for hours? Facebook is not any better.
We love Twitter, but it is not a place for serious business.
“Most social media are perfectly suitable methods for communicating with investors, 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,” said George Canellos, acting director of the SEC’s Division of Enforcement, according to the Los Angeles Times.
But, dude, are social media sites really suitable methods? There is some terrible stuff on Twitter. Never look at the trending topics because some of them are very stupid or very jarring.
Big, grown-up businesses should not use Twitter to make their official announcements. Twitter should be the place for links to news articles that discuss the official announcements’ news releases.
Twitter is not the place for investor announcements. How did the SEC come to this masterful conclusion? It probed a post by “Netflix Inc. Chief Executive Reed Hastings on his personal Facebook page stating that Netflix’s monthly online viewing had exceeded one billion hours for the first time. The company didn’t report this information to investors through a news release or SEC filing,” according to The Wall Street Journal’s article.
The day Hastings revealed that news, Netflix’s shares jumped by 6.2 percent, according to the article. It was the only time Netflix had revealed that sort of information on a Facebook page, personal or private. The company also didn’t alert investors that the particular announcement would be made. Obviously, it resulted in higher shares.
According to the Los Angeles Times, “The SEC said it did not commence an enforcement action or accuse Hastings of wrongdoing because of the market uncertainty about the use of social media.”
Businesses should not use any social media site for grown-up reasons. That’s what news releases are for.
