eBay's lawyers devise a disclosure policy to ease worries about live tweeting of company events
Facebook, YouTube, LinkedIn and now Twitter: corporations are beginning to take the plunge into social media. And IROs, following their marketing colleagues, are getting a few toes in the water. But is this a tsunami to navigate, or just another comber on the beach? Who knows? In the words of one infamous Wall Street figure, who scuttled for excuses after the credit explosion: ‘If everybody is dancing, you can’t be sitting down.’
One big-name Twitter user in the investor relations realm is eBay. It has been covering earnings announcements and other corporate events with the social media tool for more than a year now. The Financial Times quoted eBay blogger Richard Brewer-Hay as saying: ‘I’m getting it to a new audience.’ He engages in so-called live tweeting, a rather bold action given that a slip of a finger might cause a disclosure problem.
Most other experimenters are less daring, keeping their Twitter participation safe by simply announcing press releases or the availability of material such as slides and transcripts, all of which have already run the time-consuming gauntlet of corporate approvals. Both Rio Tinto and Barrick Gold are doing that sort of thing in the mining sector.
‘Obviously the web has fundamentally changed the world,’ says Vince Borg, Barrick’s executive vice president of corporate communications. ‘Twitter is another vehicle in the array of technical options you have at your disposal.’ Asked about Twitter’s effectiveness, he responds, ‘It’s still early days to really judge that, but you’ve got to try.’
Lawyering up
Luckily for eBay, its lawyers shared this opinion. Brewer-Hay had actually tweeted eBay’s three earnings calls up to January, as well as a number of other company events, without mentioning it to the legal team. When it discovered what he was up to, the blogger feared his social media adventure could be spiked.
Instead, eBay’s lawyers took the opportunity to craft some social media guidelines that, they hope, will prevent the tweets from falling foul of regulators. They devised some legal disclaimers that work within Twitter’s 140-word messages (see Playing it safe, below). These were rolled out before Brewer-Hay live-tweeted eBay’s first quarter earnings call in April.
As well as posting four legal disclaimers before tweeting an event, the auction site set up a separate legal page for its blog site that includes cautionary statements related to blogs or tweets containing earnings or other company information.
A recent survey from the world of marketing finds that nearly three quarters of the companies that responded have adopted some form of social media. Among the many interesting statistics are the ratings, with Twitter at number one, followed closely by blogs, LinkedIn and Facebook.
New frontiers
In the IR world, however, there are just a few brave souls getting involved. They are making discoveries of value and reporting back to those who choose the watchful-waiting mode. Nevertheless, veteran web-centric communicator and university instructor Jane Stevens is among those who insist social media are must-use tools. ‘I’m convinced that if you don’t build and run a site that includes social networking, you just don’t get it,’ says Stevens, who is running a study of new communications practices as a fellow at the University of Missouri’s School of Journalism.
For already nervous IROs, it is beyond a stretch to wriggle out of established comfort zones and into this exposed and real-time world. This looks to be a reminder of a US judge’s famed pronouncement back in the 1990s that practicing investor relations is a bit like walking an electrified tightrope. Social media just crank up the current.
Playing it safe
Lawyers for eBay devised four legal disclaimers to preface its live tweeting of company events. They are:
Tweet 1: Important information about the nature of this session. Forward-looking statements and non-GAAP financial measures. Click here.
Tweet 2: This session will contain non-GAAP financial measures.
Tweet 3: The presentation of this financial information is not intended to be considered in isolation or as a substitute for GAAP financial measures.
Tweet 4: A reconciliation of these measures to the nearest comparable GAAP measures can be found by clicking on the following link.
Blogger-in-chief
Richard Brewer-Hay was brought in as eBay’s official blogger last year to boost the company’s social media credentials. He runs eBay’s blog site, eBay Ink, and roused the attention of eBay’s lawyers through his tweeting of company events, throwing up new questions around corporate disclosure.
Brewer-Hay admits he feels the pressure. On a tweet after covering April’s earnings call, he wrote, ‘It’s a strange adrenaline rush once the call begins. I’m usually ready for it to end by 2.40 pm, though.’
