Slashdot Mirror
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?
Holy shit man, 4 pizzas? No wonder we are obese as a nation.
Can someone explain why saying something like this can get you in trouble with the SEC?
I'm still baffled why anyone would post anything meaningful about themselves on Facebook. How many kids have gotten themselves busted for posting pictures of stuff they shouldn't be doing. Or adults for that matter. Just how attention starved are people these days? I would have thought the CEO of a fairly large company would be smarter than this. Hell, I would have guessed that someone in that position would have a staff of marketers specifically to do this for them.
Sure sounds public to me.
09 F9 11 02 9D 74 E3 5B - D8 41 56 C5 63 56 88 C0 45 5F E1 04 22 CA 29 C4 93 3F 95 05 2B 79 2A B2
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. While possible, I think this statement should have led to some raised eyebrows.
...and the banks are walking? Seriously. Priorities people!
For those who seek perfection there can be no rest on this side of the grave.
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.
Except that's not accurate...
In this case it'd be like him being the CEO of Domino's and saying he ate four of their own pizzas, or that their customers ate 4 billion in June.
Don't just make up some random hypothetical bad situation.
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.
and they told me to watch videos on Internet Explorer instead. Well the TV for my parents was not hooked up to the PC.
You could always buy a PC and plug it in. It'd be cheaper than starting your cable sub again, unless of course your cable company offers free TV with Internet purchase.
If Reed Hastings knows these stats why don't we? Let's petition Netflix for an hour/month (or something) stat on your account. Expose it as an API call. Interesting value proposition to people, "look how many more hours you watch Netflix than Cable!". Also easy to automate finding those needing to be surgically removed from couches. (Ok, kidding about the last bit, but not anything else)
You don't have to speculate. Political contributions -- at least to groups affiliated with candidates and parties -- are a matter of public record.
As it happens, Reed Hastings donated a lot of money, all of it to Democrats. So, either the Republicans are behind this despite not having control of the White House, or your theory should have been researched a little more carefully.
This relates to Regulation FD (for "Full Disclosure"). Basically, you can't release information that could be material to investors (i.e. potentially affect their decision to buy/hold/sell your stock) without making it available to all investors. This rule was written because, in the past, companies would have informal conversations with institutional investors and analysts and give them information that would better inform their investing decisions before that information was "publically" released. Any corporate attorney worth their salt would advise the CEO to release this type of information in a Form 8K (an "informational" filing with the SEC) at the same time a statement like this was made. It clearly speaks to demand and, indirectly, sales revenues for the current and future quarters. Most analysis and investors are interested in that type of metric. If the CEO intended this to be a public release, it was pretty bad judgement to do it via Facebook or a blog. Just another WTF? decision from the Netflix management team...
I work for [redacted] which is why I won't say anything about [redacted] or especially anything about the [redacted] incident that [redacted] 17,000 people and caused the entire town of [redacted] to go bald and [redacted] at 3 in the morning.
Which is why anyone with an ounce of sense doesn't talk about their company (especially the higher up you go in the management chain). And especially never put it in writing. Duh.
I don't see what everyone's hang-up is with this. It's an easy mistake of semantics, subtle nonetheless.
What needs to first be determined is whether stating publicly they were "serving nearly 1 billion hours per month" a *few weeks* before makes their *privately* announced statement "customers watched 'over 1 billion hours' of videos on Netflix in June" immaterially.
Of course, I think the SEC has better things to do but the investigation is legit.
Well, my point is that no, what the Netflix CEO did was wrong.
Well, if it was wrong, and unlike you, I'm not saying it is (mostly because this sounds like a valid job activity for the CEO), then Netflix can discipline this guy for that. Not the SEC. Instead, this seems a good argument to limit more of what the SEC does.
Personally, I think making most of these regulations voluntary is a good idea. It separates the men from the boys. If your company can't be bothered to do simple or equitable information control just because it's no longer illegal, that's great for investors to know. Frankly, I think we could get away with just good accounting regulations and immediate notification of all insider trades (with no restriction on timing of insider trading).
That's a philosophical argument. Your opinions notwithstanding, the CEO made some confidential information available, the equivalent of a public announcement, to a selective audience. Now whether or not he was right in doing so, he broke the law (or at least some regulations).
That's a philosophical argument.
Given that law is applied philosophy, this sort of thing is to be expected.
Your opinions notwithstanding, the CEO made some confidential information available, the equivalent of a public announcement, to a selective audience. Now whether or not he was right in doing so, he broke the law (or at least some regulations).
But that's not the end of it. Now that we see that this particular law/regulation leads to results that don't always make sense (assuming your interpretation is correct), we can choose to keep it despite those results or change the law appropriately.
There's also the possibility that he hasn't actually broken the law and the SEC has overreached itself. I think that the likely outcome in this case since the confidential information was just an arbitrary sales threshold that the business had been close to breaking for a couple of months (something which I gather was common knowledge at the time). In other words, that his defense for his actions is correct.
Can you please go after some REAL criminals for a change?
Thank you.
Another point to consider is that a lot of business data is "Encoded". You hear a lot of stuff like "X company is 'concerned' about some such development". They can't outright say "Jim over at Seagate told me that his last batch of inventory was defective and so he won't meet his numbers this quarter" because that is too obvious. So they say things like "concerned" about "the current trends in the hard drive business being sustainable".
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
How much did Hastings have to pay for all 200,000 followers to see the post? Don't only like 10% of your followers see the post unless you pay?
Competition Good, Monopoly Bad.
Big Brother is watching...