Public Companies Should Embrace Social Media for Communication, With Caveats
Security risks and reliability issues must be factored into investor communications plans
NEW YORK, April 8, 2013 /PRNewswire/ -- The SEC has cleared the way for public companies to disclose material information via social media, and Bloomberg has integrated Twitter into its terminals. PR Newswire applauds these moves, but at the same time advises some caution when integrating social media into financial communications strategies.
"We believe the fact that the SEC is embracing social media and encouraging companies to use social channels to disseminate material information is a very good thing," commented Scott Mozarsky, PR Newswire's Chief Commercial Officer. "Companies benefit by disclosing information as broadly as possible, and by using social channels in addition to company websites and press releases to distribute material information, a company ensures more engagement with a broader audience."
However, social networks could have vulnerabilities that communicators must consider when building social media strategies into their communications plans.
"Fundamentally, I support brands using social channels to communicate, but they are not perfect communication channels," noted Sarah Skerik, PR Newswire's vice president of content marketing "Social networks were not designed with Regulation FD in mind. Some have reliability issues and they can and do make changes to their platforms with little or no warning to users. Regulation FD is premised upon broad and simultaneous disclosure. Using social media as an exclusive means of disclosure rather than to complement other forms of disclosure would lead to selective disclosure with a specific segment of investors rather than simultaneous disclosure to all relevant investors."
Both Mozarsky and Skerik offered additional responses to the SEC ruling on the PR Newswire blog last week. You can read their full posts here:
"Social Media, the SEC & the Impact for Public Companies," by Scott Mozarsky:
"4 Reasons You Shouldn't Rely Solely on Social Media to Communicate," by Sarah Skerik:
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