What Can Louisville’s Kevin Ware Teach the SEC and Public Companies About Social Media?

April 4, 2013
by Thomas Becktold, Senior Vice President, Global Marketing

Turns out, quite a bit.  You see, within hours of his terrible injury on the basketball court, fans were flocking to Twitter to offer their support.  Unfortunately, most were initially going to a fake Twitter account and weren’t engaging with Kevin Ware at all.

Following the April 2, 2013 SEC Report of Investigation that says social media accounts fall under the guidelines of their 2008 Interpretive Guidance Report on IR sites, we have put together some tips to help public companies in their IR social media efforts.

Social media engagement should be a part of the communications mosaic, but it is not a replacement for full, fair and simultaneous distribution of news achieved through Business Wire.  Investor relations professionals appreciate that their audiences are diverse and dispersed and use a wide range of platforms and content sources to access material information.


Social Media Opportunities for Public Companies

  • Social media channels offer the ability to gather intelligence and engage in two-way conversations, and as part of a comprehensive communications mix, are quite valuable.
  • Companies should establish official IR-specific social media channels on key platforms, even if they are not ready to use them.  If the channels are not active, put a disclaimer or keep them dark.
  • For those with a solid understanding of social media and their investor audiences, regular, consistent use of the channels for both good news and bad news is key.  Just like any other disclosure platform, don’t tweet or post only the good results and skip the bad ones.  Once you commit to adding a social media channel to your communications mix, stick to it.  If you discontinue use of a channel, communicate that as well.
  • Establish and publish a clear policy on your company’s use of social media as a supplemental channel to alert investors of disclosure press releases and filings.  Cross-reference those channels on your IR site, press releases and filings.
  • Listen to conversations and track sentiment and influencers, including your company’s Twitter “Cash Tag” – tweets tagged with your ticker symbol preceded by a $.  Business Wire now offers social media sentiment analysis reports for press releases via our partnership with NUVI.  For real-time monitoring and engagement, the NUVI platform provides an easy visual representation of influencers and sentiment based on the terms you choose.

Social Media Cautions for Public Companies

  • Full and Fair Access:  According to Pew Research as reported by TechCrunch, only 16% of adult US Internet users are on Twitter.
  • Privacy: Social media channels have barriers to entry and require the user to set up accounts and agree to the terms and conditions of each channel.  Your company does not control those terms and they may be objectionable to those interested in your news.  Chances are, your own IR site, as a best-practice, does not require visitors to agree to terms and conditions to access material news.
  • Fragmentation: Where’s Waldo meets disclosure.  As an IRO, do you opt for a wide, instantaneous Business Wire distribution or solely post to Twitter or Facebook and hope people find your material information?  Ask yourself, how do your investors, potential investors and media currently access your news?  Chances are, it’s through a widely divergent set of sources.
  • Simultaneity: The fact that users must click on a link to read a full-text announcement (that will reside elsewhere) adds latency and unfairness to the disclosure process.
  • Usability: Is social media going to meet the needs of your audiences?  Is it realistic to ask your institutional investors to hit “Like” on Facebook to get the latest earnings release alongside their elementary school friend’s picture of their latest cake or new puppy?  Should you expect your retail investor to stop relying on their brokerage account to access your news because it’s no longer there and instead subscribe to your Twitter feed?
  • Security: Don’t use social media as your sole means for disclosure: Look at Kevin Ware, the Louisville basketball player and what happened on Twitter just after his recent on-court accident.  Someone set up a fake account because, yes, we know it’s that easy to do.  And, that fake account had more followers than his real account.  Imagine potential investors searching in vain for the “real Twitter account” for your company when breaking news happens?  (Or finding that the official account has been hacked, as recently happened to both Burger King and Jeep.) Want to get a “verified” account?  Good luck —  and it might not make a difference anyway, according to this recent Mashable article. The Business Wire slug ensures a seamless, secure, audited experience.
  • Reliability: Twitter has been riddled with outages as it grows – think how many times you’ve seen the Fail Whale. Business Wire operates at 99%+ uptime.   With your news widely distributed, if one site or system goes down, investors have many others to turn to.
  • Liability: Leveraging a Business Wire distribution ensures full and fair distribution.  Tweeting a release today is akin to walking across a frozen lake in late March.  Your odds of making it across are good, not great.

Want to read what journalists and others are saying about the SEC ruling?  Here are a few links – the comments sections often provide greater insight for you to consider as a communications professional:

XBRL Update: Jan 2010

January 8, 2010

On December 4, 2009, the Securities and Exchange Commission launched its XBRL information portal, which can be found at http://xbrl.sec.gov. The portal consolidates in one easy to find central location all SEC related XBRL information and also highlights new XBRL developments to simplify searching for the most up-to-date information. In this issue of the XBRL Update, we will summarize the information available on the SEC’s XBRL portal, discuss the quality of the second wave of filings and provide you an update on how to best prepare for the upcoming 10-K and detailed tagging requirements.

SEC’s XBRL Portal

The SEC’s XBRL portal contains five main categories: Rules and Regulations; Background; View Filings; Interpretive Guidance; and Technical. Details of each category are as follows:

  • Rules and Regulations: Contains postings of final XBRL rules for Publicly Traded Companies, Mutual Funds, Nationally Recognized Statistical Rating Organizations and the Voluntary Filer Program (VFP).
    • Allows users to access the respective rules and regulations without having to search through the SEC website.
  • Background: Contains general XBRL information, covering:
    • A brief synopsis of XBRL and the countries in which XBRL has already been implemented.
    • A glossary of frequently used terms (i.e. element, concept, extensions, etc).
    • History of the SEC’s adoption of XBRL and information regarding the Office of Interactive Disclosure (OID).
  • View Filings: Various options for viewing XBRL filings submitted to the SEC are listed:
    • Users may subscribe to an RSS feed or view the latest 100 XBRL files submitted to the SEC.
    • View filings submitted under the VFP.
    • Search EDGAR filings (which include XBRL exhibits, if submitted) by company name, ticker symbol or CIK number.
    • Link to upload XBRL files to the Interactive Data Viewer (“Previewer”).
  • Interpretive Guidance: The SEC will continue to issue XBRL guidance based on their

review of interactive data submissions and questions raised by filers and agents.

  • Technical: The technical section includes links to:
    • Approved taxonomies.
    • The EDGAR Filer Manual.
    • Shortcut to the SEC Previewer.
    • Listing of EDGAR XBRL Validation Errors and Warnings.

Second Wave of Filings Submitted to the SEC

On September 28, 2009, the SEC updated the EDGAR system to enhance its Interactive Data (XBRL) file validation capabilities. Since the update, Business Wire has been closely monitoring the quality of the filings, noting a marked improvement in the SEC submissions as compared to the prior quarter. Furthermore, upon closer examination, we have noted through two sets of independent validation tools that the SEC continues to accept filings with EDGAR Filer Manual

errors. From September 28th through November 20th, we noted 30 out of 410 filings had at least one error according to one of the validation tools.

10-K and Detailed Tagging Requirements

Along with the 10‐K filing come additional XBRL requirements, which include mapping: the Statement of Shareholders’ Equity, additional notes to the financial statements and financial statement schedules.

  • Detailed Tagging: For clients required to file XBRL exhibits in the first phase, detailed tagging will be here before we know it. First phase filers will be required to present detailed tags for their second quarter filing in 2010. Detail tagging creates an additional burden on the filer as it increases the amount of work required to ensure XBRL compliance and forces the filer to change their financial reporting process to ensure ample time in incorporating last minute changes.

Have any XBRL questions or concerns?  Simply contact us at XBRL@BusinessWire.com.

The SEC’s Interpretive Guidance on the Use of Company Web Sites: A Reality Check

August 8, 2008

In Business Wire’s response to the Securities and Exchange Commission’s (SEC) Interpretive Guidance release on the use of company web sites, we cite some very real concerns that the commission’s report did not effectively address. From security issues to simultaneity, the release provides no enhancements to the current disclosure model for material news and in fact introduces quite a bit of ambiguity with regards to disclosure.

Today, Reuters did an analysis piece on the issue that’s a good read. This excerpt cites a member of the SEC’s own Advisory Committee on Improvements to Financial Reporting (CIFR) which provided guidance to the SEC for this ruling:

“The advisory committee’s report says its recommendations on increased website usage are “not intended to affect the valuable role that newswires and other news vehicles play in disseminating important company information,” said advisory committee member Edward Nusbaum, chief executive of auditing firm Grant Thornton.

And this, citing a former SEC director who now advises companies on corporate governance:

“The SEC’s report outlining the guidelines says there are “very limited circumstances” where the Internet could be the sole way to disclose information, and urged companies to take additional steps to notify investors. No matter what the rules are, some people will abuse the system, said David Martin, co-chief of the corporate practices division at Covington & Burling LLP and former director of the SEC’s Division of Corporation Finance. “Am I going to say to my clients, ‘Play “Where’s Waldo” with this information?’ No,” said Martin, who advises companies on corporate governance.”

One thing we know for sure, the vast majority of public companies embrace the concept of full and fair disclosure, creating a level playing field for all investors, regardless of their technical sophistication in accessing news. Business Wire provides a secure, trusted platform for both news issuers and recipients. Authenticated content, issued with sub-second simultaneity via patented technology to all market participants, in a variety of formats so that tables and content are rendered properly in each setting.

For each individual issuer to replicate that level of distribution on their own is unrealistic. For end-users such as investor services, content aggregators and news services to accommodate the varying formats and technologies of individual issuers is also simply unrealistic. To say that RSS or Atom feeds do the same thing is naive at best and dangerous to a fair and open market at worse.

Business Wire works with tens of thousands of companies each year to accommodate their specific requirements in the dissemination of material news. Ask any of our professional editors if that process is turnkey. It certainly is not. They coordinate translations, fix formatting problems, catch typos and add keywords which are essential to the sophisticated coding systems/engines powering today’s information platforms.

We work with market regulators, exchanges, news services, content aggregators and a wide range of media to ensure our news feeds are received, parsed and displayed properly. Ask any of our development staff or the staffs of the vital sources of news if that process is turnkey. There is no such thing as “one size fits all” technology that would make the display and use of content work for the different technologies used by the thousands of recipients we accommodate. Our editors and our patented NX network accommodate the varying needs of these sources.

As we’ve moved from ANPA-based content to XHTML-based content, the push towards adoption of wider earnings tables by end-users has been a years-long process. With XBRL mandates on the horizon, Business Wire stands uniquely ready, with the experience and technology, to help issuers and recipients adapt to that reality. Don’t know ANPA, XHTML or XBRL? If you hope to push content out effectively, better start studying.

As for RSS and web postings, they are very important components of effective outreach. But they are just components. For example, Google scrapes sites for news. It doesn’t host news content. So, if you issue your release just after a scrape of your site, there’s going to be a delay in it showing up in Google searches. And if that’s your core method of distribution, you’ve got some unhappy shareholders that didn’t get your news or have to trade based on what external voices are saying about you in those search results.

The sources individuals trust to get their news continues to fragment. The cool thing about Business Wire is we are constantly working with new sources and technologies to ensure our news feeds are included in their offerings. To flip the model and say the onus is now on the individual to seek out and authenticate material news from public companies doesn’t make sense. Individuals already can create their own custom feed of content using RSS and Atom, but they don’t have to do that. They can also rely on their favorite website or investor service to do that for them, simultaneous to what professional investors see.

J. Robert Brown of the legal blog “The Race to the Bottom” has an interesting take on the SEC release as well, calling it a “great disappointment, containing nothing that the average security lawyer doesn’t already know.” The blog discusses how so much of the release’s offerings on a company’s ability to adopt different technologies and procedures for disclosure “depends upon the facts and circumstances.” Ambiguity, not clarity.

Finally, the failure to address the very real security issues that would naturally flow from the sole use of a company web site for disclosure postings is also troubling. This is particularly crucial in light of this week’s headline news about the FBI breaking a major international identity theft ring. On the identity theft case, they show how advanced and adept individuals can be (and how they can network together quickly) to exploit security weaknesses. On the SEC guidance, however, they are silent on the issue. To think that hackers and others won’t attempt to exploit public companies looking for unreleased, pre-posted material news is naive. Just read today’s news headlines to get a glimpse at the creativity of those seeking to gain unfair financial advantage.

Business Wire’s Preliminary Comments on SEC Disclosure Vote

August 1, 2008

We know there has been much discussion in the past day with regards to the SEC’s statement on websites and disclosure. Our press release issued today indicates that before we can issue a detailed response, we are waiting until the SEC’s interpretive guidance is issued.

However, we continue to maintain that simply posting material news on a corporate web site or using blogs does not meet the spirit and intent of Regulation FD because it is neither simultaneous, nor full and fair. It is Business Wire’s belief that this is not what the SEC intended.

As we have stated in the past, the use of web sites as an ancillary means of news dissemination is, in our view, a best practice. However, web posting or blogs alone are not a substitute for secure and simultaneous push delivery of material news to the disclosure media, financial markets, online web portals, aggregators, and the global investing public. Neither does it accomplish the requirements of the major stock exchanges.

SEC Releases Rule Proposal on the use of Interactive Data (XBRL)

May 15, 2008

Here’s an item from Business Wire’s Michael Becker, VP of Global Disclosure & Reporting Services:

The US Securities and Exchange Commission (SEC) proposed that issuers provide corporate financial statement information to the Commission in interactive data (XBRL) format.

If adopted, the first interactive data provided under the new rules would be made public in early 2009. The remaining companies using U.S. GAAP would provide this disclosure over the following two years. Companies using International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board would provide this disclosure for fiscal periods ending in late 2010.

Additional proposed items:

  • In the initial year of a company’s filing, they would be required to provide single identifiers (tags) for each footnote and schedule but starting in year two of XBRL submission, the company would be required to provide more detailed identifiers for elements within the footnotes themselves.
  • XBRL documents would be submitted in addition to the official ASCII or HTML filing and then filed at the same time. The only exception to this rule is that the first time a company submits in XBRL format and the first time they provide detailed tagging of the footnotes, the company would be allowed a 30 day grace period after the traditional filing during which they could submit the XBRL documents.
  • Companies also would be required to post this information on their websites.

Business Wire is the only newswire service with in-house XBRL expertise and is prepared to help your company transition to XBRL reporting quickly and easily. Our EarningsDirect service is a simple, non-technical method for tagging EDGAR filings and earnings news releases in XBRL format.

The process couldn’t be easier; we convert the data to XBRL for you. Analysts, investors and the financial media receive your financials in XBRL format with a special PDF file, the Interactive Financial Statement (IFS). The IFS allows users to quickly understand, via detailed TagTips, how your financials have been tagged in XBRL. The IFS also contains the raw XBRL required for market participants to analyze the data in real time.

SEC Open Meeting on XBRL (Update: Date Change)

April 16, 2008

The SEC on Wednesday issued a Sunshine Act notice that on Monday, April 21, there will be an SEC Open Meeting to consider a possible rule for interactive data, also known as XBRL. The text of the rule itself will be published shortly after the meeting and we of course will keep you updated as to what develops.

Update: The SEC has changed the date of this meeting to Thursday Wednesday, May 14. The reason given in the SEC notice: “At times, changes in Commission priorities require alterations in the scheduling of meeting items.”


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