U.S. public companies can use social media to make company announcements as long as they inform investors of the channels they will use to distribute the information, according to a pronouncement by the SEC.
The SEC released a report that makes it clear that companies can use social media outlets such as 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 medium the company will use to report the information.
The SEC’s report, available at tinyurl.com/cn2mga2, describes its findings and recommendations in its investigation of Netflix and its CEO, Reed Hastings. On July 3, Hastings used his personal Facebook page to announce that Netflix had streamed 1 billion hours of content in June, according to the report.
Although the commission has decided not to pursue an enforcement action in the matter, its investigation found that neither Hastings nor Netflix had made the investing public aware that Hastings’ personal Facebook page might be used to communicate information about Netflix.
The report says Regulation FD applies to social media and other emerging means of communication in the same way it applies to public companies’ websites. Guidance the SEC issued in 2008 said that websites can be used to inform investors as long as they have been made aware that company information will be posted on the websites.
Regulation FD requires companies to distribute information to the public broadly and nonexclusively, so that all investors will be able to get the information at the same time. The report on the Netflix investigation represented the SEC’s first specific guidance on whether announcements on social media can satisfy the disclosure requirements of Regulation FD.
Business executives are upbeat about their revenue and expansion plans in the next 12 months. But optimism about the U.S. economy remains lukewarm, according to the first-quarter AICPA Business & Industry Economic Outlook Survey.
The CPA Outlook Index (CPAOI) rose seven points to 66—the second-highest CPAOI reading in the five years of the survey, tying the second quarter of 2011. Each of the nine components that make up the index increased from the previous quarter, led by U.S. economic optimism, which jumped 14 points to 50. A reading above 50 indicates a generally positive outlook.
Despite the surge, the economic optimism figure indicates that some uncertainty lingers about the economy. The main culprit: uncertainty in Washington.
In November, the presidential election and looming fiscal cliff were heavy on the minds of CPA decision-makers. Now, they’re more confident in their own businesses but still wary of Washington.
Real estate industry optimism is up sharply, from 40% in the fourth quarter to 59% in the first quarter. Survey details are available at tinyurl.com/advwfr7.