Netflix vs. the SEC...More Like the SEC vs. Social Media
December 7, 2012
Your CEO posts on Facebook. The stock sky-rockets. SEC files a civil claim.
That’s what Netflix and CEO Reed Hastings are dealing with after Hastings told his 200,000 Facebook fans that Netflix viewing “exceeded 1 billion hours” of videos in June. The shares jumped 6.2 percent that day.
We can argue back and forth whether or not the information was ‘material.’ Hasting’s didn’t see it that way, but clearly many investors did.
The real issue is when will the SEC catch up to reality and adjust its regulations to explictly include social media?
As Charley Moore, founder of San Fran-based online legal services firm Rocket Lawyer says, “Disclosing information to 200,000-plus Facebook users is basically the same as issuing a press release.”