A week after the Securities and Exchange Commission clarified its rules to allow for public companies to use social media outlets to announce key company information, Netflix has already decided to take advantage of it and make it official.
On Wednesday, Netflix told investors via a regulatory filing that it plans to disclose material investor information via social media channels.
This includes Twitter, Facebook, and its own blogs. It specifically mentioned CEO Redd Hastings’ Facebook page as a source of possible disclosure, fitting since the whole controversy surrounding the SEC and social media disclosures began with Hastings.
Last week, the SEC concluded a report into the Facebook activities of Reed Hastings. Back in December of 2012, Hastings ran afoul of the SEC when he posted information to his Facebook page that the SEC deemed material. What he said was that Netflix had just topped 1 billion hours of streaming per month.
The SEC claimed that the Facebook post violated Regulation Fair Disclosure, as the material information didn’t appear in an official filing or a press release or some other form of traditional notification channel. Hastings hit back with a two-pronged approach. First, he didn’t think the post constituted “material” investor info. And second, and more importantly, social media is a proper channel for any sort of disclosures – especially his own page which sports over 260,000 followers, many of which are journalists.
The SEC eventually cleared Hastings of any wrongdoing and took the opportunity to update their own policies regarding social media disclosures. The new rules say that it’s fine, as long as the company makes it known to investors beforehand that they will be using the social accounts for such purposes.
Netflix, in its filing, makes that clear:
“The information we post on social media could be deemed to be material information…In light of the SEC’s guidance, we encourage investors, the media, and others interested in our company to review the information we post on the U.S. social media.”[Wall Street Journal (paywall)]