Has the SEC just signed the death warrant for the press release market? Possibly. Standard operating procedure today is to distribute press releases through established services like Business Wire and PR Newswire but thanks to the SEC, you can post your news on social sites – as long as users are told where to look.
Reed Hastings accelerated this move by posting materially important information about his company to his Facebook page. This set off a fire storm regarding whether this action was proper or not based on current investment rules. It seems the SEC does think the behavior was OK as he is not being prosecuted.
This gets us to the news made today by Business Wire in the form of, you guessed it – a press release, where they explain social can be one form of full and fair disclosure and offers but “Business Wire believes that a broadly disseminated news release — distributed simultaneously and in real-time via a legitimate news wire service — is still the most effective way to maximize investor outreach, and to inclusively serve the needs of all market participants.”
The release goes on to explain how it is a more suitable platform than social because it protects its clients security and also ensures there is an audit trail in the case of a regulatory investigation.
Here is the reality… Companies can easily host their news on their own sites and tweet it, use Google+ or whichever services they desire. Yes, press release distribution is important but it is less so as search engines have lessened their importance in results.
I do see this move by the SEC as a major blow to Business Wire and the whole industry – that is exactly why they put out the release… To counteract the damage.
The winner here is all the social platforms you know and love and Bloomberg for its part has announced tweets will now be integrated into its terminals.
“When important news is shared on Twitter, traders and investors need to be able to access it, and validate its importance in order to incorporate that information into their decision making process,” said Jean-Paul Zammitt, head of sales and product development for the Bloomberg Professional service. “Bloomberg’s platform now provides this ability, along with the high-quality news, data and analytics our users need and have come to expect from us.”