Social Media

The way we use internet has changed drastically. We spend more time on social networks than on the ‘traditional internet’. Social media is not considered a hype any longer. Almost everyone is exposed to social media on a daily base. Social media refers to interaction among people in which they create, share, and/or exchange information and ideas in virtual communities and networks.

Corporate use of social media

People who talk about social media mostly refer to sites and tools such as Twitter, Facebook and LinkedIn, but there are many more and the number is growing each day. An increasing number of companies is active on social media. A recent study by the European Commission found that Dutch companies are at the forefront in the use of social media.

Social media could contribute to the company’s targets such as higher brand awareness, lead generation, customer satisfaction and product development. It is noted that social media are also a channel for disgruntled customers or shareholders to voice their negative opinions.

Over the past few years, companies’ use of social media to communicate with members of the investment community has grown significantly and the use of social media by a company’s Investor Relations departments is likely only to intensify in the future according to Bloomberg Law.

US regulations on social media

In April 2013, the U.S. regulator SEC issued a report that makes clear that listed companies can use social media outlets like Facebook and Twitter to announce price-sensitive information so long as investors have been alerted about which social media will be used to disseminate such information.

Dutch listed companies may also use social media for the dissemination of price-sensitive information. This can only be done however after the information has been publicly announced via a press release.

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