Steven Thel, a former SEC attorney
Netflix CEO Reed Hastings is under investigation by the Securities and Exchange Commission for a Facebook post he wrote in June telling his 200,000-plus subscribers that Netflix members had enjoyed over 1 billion hours of content that month. The SEC says this information should have been made public under the agency’s fair disclosure rules, which require companies to make public information that is considered “material” to shareholders.
Hastings responded to the probe on, that’s right, Facebook. “We think the fact of 1 billion hours of viewing in June was not “material” to investors,” adding that “posting to over 200,000 people is very public.”
What do you think? Should a social media post be considered a form of disclosure?
Geoff Considine, principal of Colorado-based research firm Quantext.
Remember, Facebook devotees: Investing in IPOs can be risky business. Read more.
What We’re Reading, 3/29/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. Making the office rounds today: campaign spending, the Facebook IPO, and student loans … for kindergartners.
"Obama Outspends Republican Campaigns by Millions," by Jack Gillum (AP). This number is worth a thousand words: Obama has spent $135 million on his campaign operations, versus the combined $132 million spent by his challengers. “What can a long primary season mean to an opponent?” Asks Letter editor Ken Bazinet. “Well, while Mitt Romney makes his long and sometimes suspect slog towards the magic number of 1,144 delegates, the Obama campaign has hired 500 staffers and opened campaign offices in nearly all 50 states, including five offices in unlikely battleground state Arizona.”
"Facebook Targeting May IPO," by Shayndi Raice and Randall Smith (Wall Street Journal). Facebook made headlines when it filed for its initial public offering in February. Now it looks like the social media monolith will go public in May, becoming the biggest IPO in history.
"Bain Gave Staff Way to Swell IRAs by Investing in Deals," by Mark Maremont (Wall Street Journal). How did Mitt Romney build his multimillion-dollar IRA? New analysis of Bain Capital’s internal documents reveals a co-investing strategy that helped employees multiply their accounts many dozen times over. Unfortunately for Romney, he’ll still get hit with a 35% capital gains tax upon withdrawal.
"Student Loans on Rise — for Kindergarten," by Annamaria Andriotis (Smart Money). Parents, especially high-income parents, increasingly take out loans for private K-12 education. “As if mounting college student-loan debt weren’t bad enough,” says staff writer Lisa Gerstner.
"Larry Summers and the Technology of Money," by Conor Myhrvold (Technology Review). The former U.S. Treasury secretary talks Amazon, Square and the rise of e-commerce — which he says is the most important innovation in information technology currently impacting the market.
"Mitt’s 1 Percent Moments," by Steve Kornacki (Salon). A collection of things that make Romney look like an “out-of-touch rich guy.” We almost forgot the NASCAR incident.
"Outside the Supreme Court, the Health-Care Party’s Over. Now What?" By Laura Vozzella (The Washington Post). The Supreme Court arguments over health care reform attracted hordes of reporters, protesters — and a cast of professional line-standers and other characters just out to have a good time. “In Washington, we have politicians, lobbyists, staff and, well, these guys,” quips web editor David Muhlbaum.
"Marx at 193," by John Lanchester (London Review of Books). Tackle this thought-provoking essay after a few cups of coffee — in it, Lanchester analyzes what Marx got right (and wrong) about capitalism.