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Public Companies Should Embrace Social Media for Communication, With Caveats

Security risks and reliability issues must be factored into investor communications plans

Apr 08, 2013, 12:31 ET from PR Newswire Association LLC

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.

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"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:

Additionally, PR Newswire's ongoing research on how investors consume content today published a new infographic that reports the use of Twitter and StockTwits by investors.

PR Newswire ( is the premier global provider of multimedia platforms that enable marketers, corporate communicators, sustainability officers, public affairs and investor relations officers to leverage content to engage with all their key audiences. Having pioneered the commercial news distribution industry 59 years ago, PR Newswire today provides end-to-end solutions to produce, optimize and target content — from rich media to online video to multimedia — and then distribute content and measure results across traditional, digital, mobile and social channels. Combining the world's largest multi-channel, multi-cultural content distribution and optimization network with comprehensive workflow tools and platforms, PR Newswire enables the world's enterprises to engage opportunity everywhere it exists. PR Newswire serves tens of thousands of clients from offices in the Americas, Europe, Middle East, Africa and the Asia-Pacific region, and is a UBM plc company.

Media Contact:
Scott Mozarsky
Executive Vice President and
Chief Commercial Officer
PR Newswire Association LLC
Phone 1-201-360-6953

SOURCE PR Newswire Association LLC

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