Story Highlights

  • The decision by SEC to permit companies to have their information exchanged on the social media happens to be a big change
  • Investors might have to include Twitter and Facebook to the to-do list
  • For investors, there are ways that they can be smart regarding demands of social-media

Most of the investors have hard time reading the 10-Ks and staying up-to-date with the releases of corporate earnings. Now, they would have to control Twitter and Facebook, too.

SECP recently announced some dramatic changes which made social media a fair enough game for the companies that are looking for some ways to give investors the information.

How that will all work is yet subject of the argument with lawyers, companies and consultants. Now the companies are considering the ways that they will adopt SEC’s blessings for using social media for sharing important information of company.

Thought there is one thing for sure: The investors would need to have the sources of information reconsidered and potentially broaden places that they go. Also, some worry that investors will get overwhelmed if they’d have to keep lookout for the financial data from different sources, whether it be Facebook or Twitter, being additional to the traditional places. Concern happens to be that once more, the professional investors acquiring tools or means to survey expanse of the data sources would have edge.

Anna Kipchuk, the senior director of CEB, the company which consults the companies regarding disseminating information, said that the landscape regarding investor information tends to have become much varied and that another forum that investors would have to watch now is the social media.

Whatever the companies finally decide about social media, the investors could start presenting strategies about dealing with the new world. The strategies include:

  • Finding What Companies Plan To Do:

Biggest caveat for permissiveness of SEC with the social media happens to be that the companies have to specifically inform how they have planned to make use of the social media. Though how companies would relay the information is unclear.

A probable option that investors would need to lookout for the would-be disclosures is at bottom of the news releases, also in quarterly and annual reports that list platforms of social media that they have planned to use.

A probable model for this should be Netflix. Company, which did spark changes when Reed Hasting, the CEO, shared non-public info at the Facebook page he had, put a disclosure which could be a pattern to follow for the other companies. On 2nd April, Netflix put out filing and a news release with SEC which described the sources of social media of company in detail. Netflix told the investors there that it posts to 5 channels of social-network that include Hastings’ Public Facebook page, Netflix Facebook page, Netflix Blog, Netflix Twitter Feed and Netflix Tech Blog.

The other companies which make use of Twitter to direct the investors to the news releases and regulatory filings include Corning, GPS maker Garmin and Ebay.

  • Know About The Rules.

In fact more dangerous compared to missing out some post from company is following the source which appears that it is company but in reality, isn’t. on 23rd April, again the investors were cautioned about it at the time market plunged a bit after some false report. One should make sure that Facebook posts and Twitter feeds that are followed are official ones direct from company.  There are companies that get the special badges in order to confirm that they are genuine, like Twitter Verified tag. And if news is very important, also confirm it on website of company.

  • Don’t Think That All Companies Would Turn To The Social Media.

Though social media could be a very good opportunity for following latest happenings about celebrities or news, some big investors are not really pushing the companies to make use of this medium. For large shareholders, following many Facebook and Twitter pages isn’t much appealing and even many companies would not do it to the investors.

With the passage of time, the services which are designed for the professional investors would probably cull data at social media for the professional investors, keeping a lot of hassle away. Even then, the spread’s most probably is to be quite slow.

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