A recent briefing issued by Gray Reed & McGraw, P.C. highlighted a lawsuit against a social media platform by an individual accusing the platform of being slack in removing a fake profile, built in their name, that was populated with pornographic images. A spiteful ex-lover built the profile: a terrible, manipulative action.
From Gray Reed:
My guess is this case will likely be removed to federal court (both defendants are out of state) and then summarily dismissed… website operators [name] are not liable for the content created by others under the Section 230 of the Communications Decency Act.
“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”
NOTE: The New York Times published an EXCELLENT piece titled Dealing With Digital Cruelty.
Although it pales in comparison (psychological and creepy) – this mainstream social media lawsuit absolutely reminded me of the recent NanoVircides v Seeking Alpha ruling. NanoVircides asked the court to force Seeking Alpha to disclose the name of an obvious (to most of us in IR) and manipulative stock pumper.
NanoVircides lost, via a core First Amendment Freedom of speech (opinion) position.
From the Supreme Court of NYS:
It is paramount in an open and free society that we protect the anonymity of those whose “publication is prompted by the desire to question, challenge and criticize the practices of those in power without incurring adverse consequences.”
So, what does this mean for “Investor Relations and Social Media?”
First, it means that the pump-and-dump “conversations” once only held in the deep and creepy board chats are now front and center on mainstream social media platforms. Before “social media,” the lionshare of chat rooms were populated by pumpers happily gaming each another. It was more like gambling than investing. Today, the elevation of these chats into mainstream portals plops the manipulative pump “stock opinions” directly in front of day-traders. Day-traders, although not proactive pumpers, are opportunistic investors.
Second, it means – to quote Talking Heads – same as it ever was. Equities cannot squelch people from expressing their investment “opinions” in social media. Similarly, restaurants and hotels are facing these legal battles over posts in review portals like Yelp and Trip Advisor.
Third, you need to listen to what is being said a bit more. IR – especially micro to small-cap issuers – should set up profiles and alerts in all the stock opinion portals. Begin to understand who the ethical opinion generators are and who the one-pump-wonders are… like the stock pumper that affected NanoVircides. This may begin to help germinate a relationship or at worst… a crisis response strategy.
Fourth, it’s time to stop ignoring social media. If fact, just call it “media.” Sit down with your PR team and make a plan, proactive and reactive. “Media” is not going away.
True, it was once a common and safe strategy to ignore the bulletin board chats… but the inescapable truth of social media is that it is now mainstream for many investors.
Fifth, start building your IR presence NOW. IR should feed the social media portals’ newsflow with your verified and legal-vetted news releases. This is a safe and simple action.
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