“Many investors have a hard enough time reading 10-Ks and keeping up with corporate earnings releases. Now they’re going to have to monitor Facebook andTwitter, too.
The Securities and Exchange Commission recently announced dramatic changes that made social media fair game for companies looking for ways to get information out to investors.
How this is all going to work is still the subject of debate with companies, consultants and lawyers. Companies are now considering how they will adopt the SEC’s blessing to use social media as a way to share important company information.
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But one thing is for sure: Investors will need to reconsider their sources of information and potentially widen the places they go to. Some also worry investors will be overwhelmed if they have to be on the lookout for financial data coming from multiple sources, be it Twitter and Facebook, in addition to traditional places. The concern is that once again, professional investors with the means or tools to survey the expanse of data sources will have the edge.
“The landscape (for investor information) has become more varied,” says Anna Kipchuk, senior director at CEB, a company that consults with companies about disseminating information. Social media “is just one more forum investors will have to be watching.”
No matter what companies ultimately decide to do with social media, investors can start coming up with their strategies to deal with this new world, including:
• Finding out what companies are planning to do. The biggest caveat to the SEC’s permissiveness with social media is that companies must inform investors specifically how they plan to use social media. It’s unclear how companies will relay this information, though.
One likely option investors will need to be on the lookout for would be disclosures at the bottom of earnings news releases, in quarterly reports and annual reports listing the social-media platforms they plan to use and the identifiers, says Joel Greenberg, a partner at law firm Kaye Scholer…..”
