Breaking news updates will no longer be the only educated content on your Twitter-feed, thanks to the latest SEC ruling, permiting companies to tweet stock updates and post financial information to Facebook. This jurisdiction has enabled the social media-savvy investor to watch their stocks, analyze business trends, and retweet your girlfriend’s tweet all on one website or dashboard… oh, how the times are changing.
This ruling occurred Tuesday, April 2nd, in response to allegations against Netflix Inc.’s CEO, Reed Hastings, for posting about the companies’ earnings to his Facebook page last July– a move others found as a violation with the SEC. Lucky for Hastings, the Securities and Exchange Commission ruled in his favor that companies are allowed to employ social media as a means of communicating with investors, as long as the investors have knowledge of which sites the company will use.
In order to ensure that companies are abiding by the ‘fair disclosure of information’ policy, the SEC said they must file an 8-k form or hold an earnings call, both of which will ensure compliance with the regulation. In fact, using social media to disseminate financial information is fairly common for large companies, and already used by Dell, eBay, Netflix, Pepsi Co. and many more. Even the Goldman Sachs Group Inc. tweeted “thanks” in reply to the commissions’ latest decree.
The SEC’s new guidelines represent a transformation towards the reality of our generation. Almost every sector of business uses social media to broadcast, publish, and communicate with their customers, so it is great to see Wall Street’s first step in the next direction. Social media is no longer just a trend, but rather a fundamental tool for two-way communication. Such communication has impacted our entire world, and is now going to impact our economy. In their Tuesday report the SEC concluded, “We appreciate the value and prevalence of social media channels in contemporary market communications, and the commission supports companies seeking new ways to communicate.” Thus, between the commissions’ liberality and Silicon Valley’s entrepreneurs, the opportunities for digitized-business are endless.