SEC Allows Public Announcements on Social Media

It feels like it wasn’t too long ago that wealthy business owners were saying social media was just a fad and it was only a matter of time before it went away. Well, last week, the Securities and Exchange Commission took one more step to deter those naysayers as they are now allowing public companies to announce key announcements on social as long as they tell investors which sites they will use.

In a day when the press releases loses more and more significance and print journalism is hanging on by the threads, it is no shock the SEC decided to take this route. Furthermore, jumping back to those pessimists, the SEC claims part of the decision was made to help companies become more social literate.

After a company announces which social media site they will be using, via their website, press release, email, etc., investors are encouraged to then follow them on the channel and check back often for important data. Good in theory, but is this type of information too valuable for the online world?

Given that the shelf life for any tweet is now under four minutes, I feel the SEC made a mistake. While I love the fact that they are trying to encourage an older generation to catch up with the times, too much money is at stake with a platform that is foreign territory to some.

Let’s say company X chooses Twitter (which I hope most don’t), how many tweets are suitable for an announcement? One? Three? Ten? Twenty? Even though a user follows a company, that doesn’t mean they will see all their messages. I follow about 1,100 users on Twitter and I have never seen a tweet from at least half of those.

As someone in the industry, I know how to set up listening tools and lists to block out all the other news coming my way, but many don’t know how to do this. Keep in mind, I use social to basically disseminate and acquire new information. If I miss something, I miss it. However, when it comes to public traded companies, real money is at play. It is just too risky.

If I was in investor, I wouldn’t be too happy with the SEC right now.