The Securities And Exchange Commission announced yesterday that publicly traded companies can announce news on social media sites in addition to traditional media.
The decision stems from an incident last year when Netflix CEO Reed Hastings said on his Facebook page that online viewing has gone over 1 billion hours for the first time. Neither he, nor the company had distributed the news in other media or filed the required Form 8K. The SEC looked into the incident after the stock price rose by over $10 which was more than 10% of the price at the time.
The SEC said they did not initiate action and there was no allegation of wr0ng doing on the part of Netflix or Hastings.
The SEC said in a press release, “Companies can use social media outlets like Facebook and Twitter to announce key information in compliance with Regulation Fair Disclosure (Regulation FD) so long as investors have been alerted about which social media will be used to disseminate such information.”