Business Wire has released a guide to social media for investor relations professionals, outlining 12 ways to use social channels to boost news distribution, along with 12 reasons why social media shouldn’t be used for material disclosure.
The guide, written by Business Wire’s director of social and evolving media, Serena Ehrlich, encourages companies to tweet during their results announcements, set up corporate blogs and consider paid placements on social channels, among other tips.
‘It’s a perfect way to enhance news,’ Ehrlich tells IR Magazine. ‘It’s a news distribution network. The problem is that because news can be tweaked all the way across the sharing network, it just can’t be used for disclosure. You can’t trust it.’
The SEC gave the green light to material disclosure via social media last April, as long as companies tell investors in advance what they plan to do. Among the companies to push the boundaries of the new guidance is Twitter, which revealed its plans for an IPO in a tweet last September.
‘It is one of the few companies that can get away with it,’ says Ehrlich. ‘Why? Because it’s Twitter: it owns the platform; it can make sure everybody sees its tweets.’
The guide’s 12 reasons to avoid social media for material news disclosure include the point that most networks tweak the information you see, depending on who you are, so you can’t guarantee everyone will see the same update. ‘They’re making sure you’re seeing a tweet that will drive you to buy, click or do business through Twitter,’ notes Ehrlich.
Most public companies appear to be on the same wavelength: a survey of US IROs undertaken by IR Magazine last year found 89 percent do not plan to use social media as a channel for material news disclosure, although 9 percent said they would consider it.
