A Watershed Moment for Social Media?

08/22/2013 4:30 pm EST


Jim Jubak

Founder and Editor, JubakPicks.com

The recent Tweet from investor Carl Icahn regarding his investment in Apple is an important development says MoneyShow's Jim Jubak and he thinks investors need to stay connected.

On Tuesday, August 13, Carl Icahn, the activist investor, tweeted that he had established a big position in Apple, had talked to Tim Cook, the Apple CEO, about returning more cash to Apple shareholders. The stock soured and it continued up the next day. We are talking about a stock moving from $465 to $500 in the course of two days. The thing that is really important about this, other than if you own Apple you are happy, the thing that is important about this is it is really a kind of watershed moment for stock markets and social media. This all happened because of a tweet.

It didn't happen because someone did an interview with Icahn. It didn't happen because someone saw it in SEC form and reported it. Basically, Icahn was able to put out what normally in another area would have been only releasable in a SEC document because the SEC was concerned about it getting out to all investors equally and Icahn tweeted it. He seems to be saying, because the SEC hasn't gone ballistic about this and, in fact, seems to be approving, is that as long as it is a public tweet, as long as it is a story that goes out to everybody, it is fair game and it is the same status as anything else; it is not privileging one set of investors over another, which is what the SEC is worried about.

The practical problem is how do you get the Icahn tweet? Well, you have to be part of his tweet stream; you have to have some connection to it. You have to have a reader tune to this. You have to be a news source which is picking this up. I saw this on briefing.com rather than getting an Icahn tweet. It really does indeed make it potential for investors to all have access to an equal playing field, but it doesn't mean you automatically get it; that you have got to go out there. The SEC is saying this is okay. You have to go out there and make sure you are tuned in to the market.

This is, in reality, what it has always been, but the SEC has always pretended that well everybody has equal access if it is filed with the SEC; it doesn't mean that it is, some people read them and some people don't, but the SEC is extending this further and saying now social media counts as equal access, and it really means that if you are not tied to some kind of tweet stream, Facebook stream, through some kind of reader, or through some kind of news source which picks them up, you really need to make sure you are, because if you are not, you are playing with one hand tied behind your back at a disadvantage to everybody else in the market and that is not a good place to be.

This is Jim Jubak for the moneyshow.com video network.

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