Reed Hastings Challenges SEC on Netflix-Related Facebook Posts
Netflix CEO Reed Hastings absolutely thinks that social media is a “public” enough forum to house statements from companies to investors.
He says that he’s “not going to back down” and that he would continue to post information about his company on Facebook.
Hastings and Netflix ran afoul of the SEC back in December over a post made last summer to Hastings’ official Facebook page. The post contained some stats about Netflix, mainly that the company was nearly a billion hours of streaming a month. He later posted that netflix had finally topped the 1 billion hour mark.
The SEC claimed that the post violated Regulation FD (Fair Disclosure), a rule that forces companies to make public disclosures of information material to investors. Usually, that means via a press release or a large news source. For the SEC, a Facebook post doesn’t count as “public” enough.
Even if the man making the post has over 250,000 subscribers. That was one of Hastings’ points when he hit back at the SEC in (you guessed it) a Facebook post.
“First, we think posting to over 200,000 people is very public, especially because many of my subscribers are reporters and bloggers.”
Hastings also made the point that he has disclosed the information in a blog prior to his Facebook post, and that the information wasn’t even “material” in the first place:
“Second, while we think my public Facebook post is public, we don’t currently use Facebook and other social media to get material information to investors; we usually get that information out in our extensive investor letters, press releases and SEC filings. We think the fact of 1 billion hours of viewing in June was not “material” to investors, and we had blogged a few weeks before that we were serving nearly 1 billion hours per month,” he said.
“I wasn’t setting out to set an example. I was sharing something to these 200,000 people,” Hastings recently told Bloomberg. “I’m not going to back down and say it’s inappropriate. I think it’s perfectly fine. Sometimes you’re just the example that triggers the debate.”
The SEC is currently considering the case.[via Bloomberg]