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SEC Investigates Netflix CEO Reed Hastings Over Facebook Posting
alexander_686 writes "The SEC is investigating Netflix CEO Reed Hastings over one of his Facebook postings. The agency is questioning his July 1 Facebook posting, seen by 200,000 followers, in which he said customers watched 'over 1 billion hours' of videos on Netflix in June. He had previously posted on his company blog that members were viewing 'nearly a billion hours per month.' From the article: '“We think the fact of 1 billion hours of viewing in June was not ‘material’ to investors, and we had blogged a few weeks before that we were serving nearly 1 billion hours per month,” Hastings said in the filing today. “We remain optimistic this can be cleared up quickly through the SEC’s review process.”'"
I'm surprised something this innocuous can anger the SEC. Wow, they're a lot stricter than I thought!
Does everything a company or company offer say have to be heavily vetted by a legal team before it can go out?
...and the banks are walking? Seriously. Priorities people!
For those who seek perfection there can be no rest on this side of the grave.
Maybe that's more a problem with analysts extrapolating incredible conclusions from small isolated bits of data... also known as anecdotes. Anyone basing buying decisions on facebook posts deserves to get burned.... SEC doesn't need to get involved here.
I wonder if the CEO donated to the 'wrong' party this past election. This sounds an awful lot like revenge.
Good security is based upon reality and common sense. Common sense is a function of having common knowledge.
He is alllowed to say that.. The issue is, is a "blog" on Facebook (where friends get updates pushed to them, and non friends get lower treatment) a "public forum"?
Learn to love Alaska
They haven't done anything about a few financial institutions purposefully destroying the world's economy, but a CEO saying his company is doing really well on facebook is a problem.
This isn't the nineteenth century, when it took a month to get the information out. Just because the stock holders are too stupid to follow him a facebook.
Also, we need to make a distinction between investment and simple stock ownership. The only time it's investment is during an IPO. After that, it's pretty much commodity trading hoping to make money off of market instability.
Well, that is per account. My family has four people on one account, making the 1 hr/day average very easy to hit. It might be better to think of it as 30m accounts, 60-120m viewers.
At that point, eyebrow raising possibilities seem to be unsurprising and mundane.
while(1) attack(People.Sandy);
The SEC isn't trying to protect the analysts who have access to the Facebook page. They're trying to protect the rest of the investors who DON'T have an equal opportunity to look at those bits of data. The SEC doesn't care what conclusions people draw from the information--it's just that everyone gets a chance to make their own decisions about such things. If the analysts draw bad conclusions, they will be punished when their share prices drop.
The real weaknesses in this case would be that the bit of data is not very interesting because a nearly identical bit of data had already been given to the public a few weeks earlier, and that 200,000 people had access to this Facebook page, so it feels more "public" than "private." I would guess that this investigation won't last very long before it's dropped.
Netflix had 29.4 million online streaming accounts as of September 2012, and with 720 hours in a month, 1E9 hours works out to each subscriber viewing an average 34 hours of online streaming per month.
You seem to be forgeting that each individual account can have multiple devices streaming simultaniously. Only PC-based playback is restricted to single-instance. I don't know if Netflix users watch the same amount of online material as their TV-based counterparts, but we can infer a few things by assuming they do. The average person watches about 51.1 hours of TV a month. There are an average of about 2.55 people per household. That comes out to about 130.3 hours watched per household. Assuming 1 Netflix subscription per household, you get 3.8 billion hours of viewing per month.
I don't think 1 billion hours from that number of users is all that difficult to believe. Netflix users aren't substituting time in front of the TV straight across; That it's a supplimental activity is not an unreasonable conclusion. The CEO's numbers are well-within believability.
#fuckbeta #iamslashdot #dicemustdie
Their problem, he made no claim about the number of customers. First of all, it was already public info that they were almost at 1e9 hours, so saying they hit that level is hardly "material." Secondly, it can easily be explained by existing users simply watching more in June than in May, due to school aged children being home during the day.
"National Security is the chief cause of national insecurity." - Celine's First Law
So how many Facebook pages do you think investors would have to subscribe to in order to follow every senior executive of every company in their portfolio?
How many press release services would they have to follow? How many financial news shows would they have to watch? How many financial news web sites would they have to follow, and how closely? How many blogs would they have to read?
The company's obligation is to make sure that the information is available to the public, not that it is noticed by every single member of the public.
Having said that, the regulation is vague as to whether a Facebook page would fit the bill. Any material information has to be disseminated through a Form 8-K filing or "through another method (or combination of methods) of disclosure that is reasonably designed to provide broad, non-exclusionary distribution of the information to the public."
Yes, and somebody at the SEC is being a shithead about this.