Hacking happens all the time. If you’re a well-known digital platform you should pretty much expect it. So when Goldman Sachs announced that it was straying away from BusinessWire in favor of Twitter, and its own website, to announce Q3 earnings, the news distribution service may have been asking: is it me?
In a case of the early bird getting the worm illegally, between 2010 and 2015, hackers accessed more than 150,000 press releases from three major newswires: BusinessWire, Marketwire, and PR Newswire. Nine people were charged in August with an international scheme to hack and steal soon-to-be publicized releases that were then used to illegally trade, generating $30 million in illegal profits.
While BusinessWire may be insecure about the hacking situation, Goldman has said the security breach is not to blame. The company wanted more control over the message and timing. And a behemoth like Goldman had the brand recognition, and the financial standing within SEC rules, to pull off announcing earnings on social media and its website.
The result: too early to tell. But, this is a perfect case study in other uses for social media. Which makes one wonder, why haven’t many other companies used Twitter for earnings announcements before? And what kinds of issues could this create for Twitter to navigate?
The Securities and Exchange Commission (SEC) requires companies with a public float of at least $75 M to file quarterly and yearly earnings reports publicly whenever it chooses. The SEC also issued interpretive guidance in 2008 that corporate websites and social media channels can be used as methods to communicate with investors and/or analysts just as long as investors are alerted in advance and the social media outlets are “recognized channels of distribution.” So any Goldman-sized company can announce earnings via Twitter.
This could be a burgeoning trend. If so, Twitter has some questions to ponder. As the disruptor here, the social media behemoth should be contemplating things like:
- Whether it should create an earning announcement service or channel?
- If so, how much should it charge? Or should it even charge? (Since Twitter is a free platform)
- Who bears responsibility for earnings announcements gone-wrong?
- Who’s policing the announcements?
- And, should it make companies give them a heads up before announcing? (Kind of like calling before popping in for a visit…)
Goldman’s move is perhaps a signal that more regulated established industries are finally joining the social media party. But, when an unfettered network of free speech becomes a distribution channel for highly-regulated industries, you’d expect change on both sides of the equation.