Netflix CEO Reed Hastings Discusses SEC Investigation Of Facebook Post On CNBC

By David Cohen 

Netflix CEO Reed Hastings appeared on CNBC Thursday morning, where he spoke with Julia Boorstin about the Securities and Exchange Commission’s investigation of his Facebook post about Netflix topping 1 billion hours of viewership in June.

The SEC claimed in December that Netflix and Hastings violated its rules governing selective disclosure with the Facebook post, which appeared on the same day shares in the company rose 6.2 percent, marking its share price’s largest gain in six weeks.

Hastings told Boorstin:

It’s normal for government to be kind of one beat behind, you know, where things are going. So we’ll see how that works through. Basically, we’re very principled about sharing information, being very transparent, having that be equal access, and about protecting the small investor. And what they don’t want to do is give special information, say, to Carl Icahn or to someone else.

And going wide with Facebook, you know, where I’ve got hundreds — and Facebook has a public mode that I use that’s going to hundreds of thousands of subscribers — is very much in the interest of the little investor. So we feel very good about it. And I think the regulatory process will work out those things.

And when Boorstin asked Hastings if Facebook and Twitter were changing the way companies are governed, he responded:

Well, they’re changing communication vehicles. I mean, for many years, you couldn’t post something on a blog and have it count on Reg FD. And, you know, eventually, they caught up with the modern world. And again, it’s normal for government to be one step behind, and probably healthy. You know, it’s probably not a good thing for government to be on the cutting edge of these things. So then that’s OK. And we were just in those crosshairs where it’ll be the learning example, and that’s fine.

Readers: Do you think Hastings did anything wrong by posting the news about Netflix reaching 1 billion hours of viewership in June on Facebook?