Netflix (NASDAQ:NFLX) is in big trouble with the SEC. Reed Hastings, its CEO, posted information to his Facebook (NASDAQ:FB) page that the regulator says was "material" to investors. The SEC's Notice says the company should have put it in a conventional press release to investors, so that it was in the public domain.
In IT Blogwatch, bloggers wonder why a public Facebook post, on a public page, available to a billion users isn't public enough.
Your humble blogwatcher curated these bloggy bits for your entertainment.
Jay Alabaster reports that Hastings is in hot water:
[The] CEO posted user numbers on his personal Facebook page, instead of an official release. ...it dates back to a July posting...on Facebook [that] said over 1 billion hours of content were viewed by users in June.
At the core of the case is whether the Netflix CEO's postings on his personal, but openly viewable, Facebook page are sufficiently "official" or "public" enough for investing laws. ... The SEC said...it will recommend legal action. MORE
Aunty Beeb speaks peace unto nation:
[The] SEC said it should have been disclosed via...a press release or regulatory filing in order to give "full and fair" public disclosure. ... [The] Facebook page has more than 244,000 subscribers.
If the SEC decides to penalise the company, it could be facing a fine. MORE
Netflix' Reed Hastings, calls it a "Fascinating social media story":
we think posting to over 200,000 people is very public...many of my subscribers are reporters and bloggers. ... We think the fact of 1 billion hours of viewing in June was not “material” to investors. ...while our stock rose the day of my public post, [it] started well before my mid-morning post was out, likely driven by [a] positive Citigroup research report. MORE
But Molly McCluskey is no fool:
More than a year ago, I wrote, "If Netflix keeps shooting itself in the foot, it's going to need more ammo." ... So, when I read about the SEC investigating one of Hasting's Facebook posts, I was tempted to think it was [more of the same]. Until I looked a little closer. ... [His post] not especially earth-shattering news...the company had mentioned weeks earlier...that it was approaching the one billion mark.
the only information that has been accidentally leaked is that the SEC doesn't [get] social media. MORE
And Cliff Edwards sees the trend:
Company executives are increasingly using social media as a tool to communicate with customers and investors. ... Silicon Valley has been testing the boundaries of the SEC’s disclosure rules for years. Some [argue] that the Internet has made it easier for people to obtain information, thus making [a] press-release...less valuable.
A champion of this idea was Jonathan Schwartz, former CEO of Sun. ... Schwartz called the SEC’s requirements “anachronistic.” MORE
Meanwhile, Eric Savitz rolls his eyes:
it is the weirdest story of the day. ... Yes, this is what the SEC has been reduced to: citing a CEO who posted...to Facebook.
Sad. And silly. MORE