Netflix (NASDAQ:NFLX) CEO Reed Hastings got into hot water last summer. A couple of his personal Facebook (NASDAQ: FB) updates contained information that some considered to be of material interest to shareholders. Indeed, one update on sky-high streaming hours certainly moved the Netflix stock.
Some thought this was an inappropriate use of social media. An SEC investigation was started, not to mention several class action lawsuits. Tweets and Facebook posts shouldn't be required reading for investors! These outlets have no business affecting Netflix share prices!
The storm has mostly blown over. The SEC dropped its investigation last week, but also provided Netflix with guidelines on what social media is kosher or not for business disclosures. And last night, Netflix provided a handy list to keep investors informed -- published as an 8-K SEC filing, just to be sure.
In this filing, Netflix notes that material information will typically be found in all the usual channels:
But that's no longer all. A truly informed Netflix investor should also keep tabs on these newfangled potential news outlets:
The Netflix blog
The Netflix tech blog
The company's Facebook page
Its official Twitter feed
And of course, Reed Hastings' Facebook page, which started this whole spectacle.
For what it's worth, I've been tracking all of these channels for years. It just seems appropriate for a Netflix shareholder who frequently writes about the company, don't you think? SEC rules have finally caught up to reality.
As long as this list is, I'm actually still missing a few seemingly obvious outlets. Wouldn't it make sense to include the business-oriented LinkedIn (NYSE: LNKD) service? Netflix may not post a lot of original articles there, but you can often find out about promotions and firings from that public source.
And speaking of jobs, you can often draw business conclusions from Netflix's online job postings (at Netflix and LinkedIn, though neither page is included in the "essential reading" list above). For example, the company is hiring lots of content acquisition specialists in Latin America right now. Should we expect heavy content investments and a local marketing push to follow?
I think we should expect similar lists from many other companies, especially in the tech and media spheres. Netflix is far from the only business to make use of modern communications channels, and investment-grade information could easily slip into such channels by mistake. So why not make it official?
That would be a huge personal victory for Hastings, who also serves on Facebook's board of directors. Expanding and legitimizing that service for new uses, like market-moving news postings, would certainly be in Facebook's best interest.
And staying out of legal and regulatory trouble when juicy tidbits are dropped into Twitter or Facebook is most definitely good for Netflix and its stock. Well played, Mr. Hastings.
The Motley Fool owns shares of Facebook and Netflix. The Fool has bought calls on Facebook. Motley Fool newsletter services have recommended buying shares of LinkedIn, Facebook, and Netflix. The Motley Fool has a disclosure policy.