Marketwatch: Twitter, Facebook, Linkedin OK for Corporate Disclosures, SEC Says, but Companies are Wary
The Securities and Exchange Commission on Tuesday gave explicit permission for companies to use media such as Twitter and Facebook to announce key nuggets of information, but it turns out that many public companies still aren't sure about what they are allowed to do.
That's according to a new survey of CFOs and investor relations professionals at Fortune 1000 companies conducted by KCSA Strategic Communications.
According to the survey, 77% of CFOs and investor relations professionals at major public companies do not think the SEC has given enough guidance on how to use social media to disclose company information. It added that 86% would be willing to incorporate social media into their investor relations strategies if the SEC provided clearer guidance on the subject.
It added that 38% are currently using social media as part of their investor relations efforts. (Of the 38% using social media, 56% use Twitter, while 22% use LinkedIn LNKD +2.46% and 11% use Facebook FB +2.93% ).
Specifically, the SEC said companies can use social media such as Twitter and Facebook to announce key pieces of information, so long as investors have been alerted about which social media will be used to disseminate it.
However, Jeff Corbin, chief executive officer of KCSA, tells MarketWatch that there are a series of specific types of guidance the SEC could put out that would alleviate any ambiguity about when company info can be tweeted out. He said the agency was moving in the right direction but it needed to explain whether companies need to file an 8K material change report with the SEC when they tweeted some useful piece of info. Corbin contends that companies don't want to have to file an 8K every time they tweet something.
He added that the SEC could say in its guidance that companies can send out a tweet on a subject and follow existing agency disclosure rules when it comes to deciding whether to file an 8K. To be safe, companies can file an 8K every time they tweet, he said.
The SEC guidance could also say that companies should indicate each type of social media they intend to use to communicate in their most recent annual report, Corbin said.
The SEC guidance, for what it's worth, comes after the agency probed a post by Netflix CEO Reed Hastings last year on his personal Facebook page stating that Netflix's monthly online viewing had exceeded one billion hours for the first time. The SEC decided not to initiate an enforcement action or allege wrongdoing by Hastings or Netflix.
However, some think that Tuesday's ruling will have a major impact. According to Wired Magazine, the agency ruling will allow "tech-savvy corporations" to expand their disruption of the corporate press and build their own audiences and "shape their own public narrative."
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