Facebook Inc (FB), Netflix, Inc. (NFLX): It Is Now an Essential Tool for All Investors

Until now, that is. The SEC’s ruling in this case has effectively condoned the use of social media channels for this purpose — though, the only two channels expressly mentioned were Facebook Inc (NASDAQ:FB) and Twitter. Companies must nevertheless keep three things in mind. First, whether or not the disclosure does, in fact, contain material, nonpublic information as covered by Reg FD. Second, “if the [company] were to elect not to file a Form 8-K, the [company] would need to consider whether the information was being disseminated in a manner reasonably designed to provide broad, non-exclusionary distribution of the information to the public” (emphasis mine). And third, whether the specific channel — be it Facebook, Twitter, or MySpace (just joking about the last one) — is a “recognized channel of distribution.”

So, what does this mean for investors? It means that social media forums such as Facebook are no longer simply places to post self-gratifying pictures, publicize your relationship status, or make ostensibly irreverent comments about whatever’s on your mind. They may soon become a serious place for serious investors to get serious information.

The article Facebook Is Now an Essential Tool for All Investors originally appeared on Fool.com and is written by John Maxfield.

John Maxfield has no position in any stocks mentioned. The Motley Fool recommends Facebook and Netflix. The Motley Fool owns shares of Facebook and Netflix.

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