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Saturday April 27, 2013 MYT 9:35:00 AM
Thursday August 15, 2013 MYT 9:37:37 AM
by jagdev singh sidhu
NEARLY all of my friends are on social media. Most use Facebook and Twitter to keep in touch with their friends, communicate what's on their minds, and to take a stand on a number of subjects and issues that are posted online.
It's a new way of communicating whether we like it or not. Although I do have a Facebook and Twitter accounts, I hardly use them in my daily routine. I do, however, follow what others are saying and communicating in such a manner is increasingly ingrained in the lives of most people and businesses.
For businesses, the domain of disclosure will likely morph over time with an increased reliance on social media. CEOs are twitting and companies are increasingly using their Facebook page to connect with the online world to promote and disseminate information.
In fact, it's so prevalent now that the US Securities and Exchange Commission (SEC) has allowed companies to post sensitive financial information and disclosure on their Facebook pages.
That new and somewhat revolutionary mode is light years from how it was done in the old days. Back then in Malaysia, announcements by Corporate Malaysia were either faxed to the media or printed on paper and left in pigeon holes at the stock exchange for analysts and the media to retrieve.
The method of disclosure then migrated onto the Internet where investors and the public can have equal and direct access to. It's an efficient method where the domain of information is spread to all and sundry; a single point where everyone can get to.
Whether Bursa Malaysia and its listed companies follow the lead of the SEC bears watching but the expansion of modes to corporate information in the US is still undergoing a teething process.
The lack of a singular source of information may lead to arbitrage opportunity and relying on social media for accurate and timely information may still be fraught with risk.
Case in point was the episode this past week when the Associated Press' (AP) Twitter account was hacked to release false information about the White House being bombed and the US President injured in that fictitious attack.
Traders who follow the AP twitter account believed it was true and panic ensued. The Dow Jones Industrial Average plunged 145 points but recovered within minutes after it became apparent the news was a hoax.
Other markets too felt the brief impact as the price of gold shot up and the dollar weakened. It's envisageable that people would have lost money based on that false news.
The hacking of the AP account also shows that the sanctity of news now resides with multiple sources. Newspapers, wire agencies and television stations that print and broadcast business news have always been seen as trusted sources of information, albeit there are mistakes and errors from time to time due to human intervention.
It's hard to hack those embedded and more resilient systems. But not so in the online world. Online news will be viewed with a tinge of suspicion until security in the social media space improves.
Security will get better as each episode with hackers will close known loopholes. It's a cat and mouse game though with online security and hackers where exploitation of systems will always be sought after by shadowy perpetrators who try to create havoc either for fame or fortune.
In the meantime, as corporations get used to the new normal, a word of caution though. Spreading information over a wide spectrum of sources will make it difficult to ensure instantaneous dissemination. It will take time, however, until a new way of telling investors information will be accepted by all.
■ Acting business features editor Jagdev Singh Sidhu wonders if it's time he starts tweeting with more regularity.
Tags / Keywords:
False news, bBig financial loss, Targeted parties
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