Announcing Earnings

There was an interesting article in the NYT today (yes, I'm guilty of having read the Times; no, I don’t usually read it - except on Wednesdays and that’s just for the Dining section which happens to be one of the happiest things that happens all week).  Anyway, Andrew Ross Sorkin wrote an article about Microsoft’s switch to releasing their quarterly earnings information via their IR website rather than through a traditional press release.  While their tactic was technically within the rules of Reg FD, Sorkin questions whether this new practice follows the spirit of the SEC regulation.  If investors end up having to chase material news all over the web rather than getting it aggregated from a news wire service what might be the consequences?  It’s easy to envision a time when some investors get news ahead of others because of the speed of their mouse (I’d be willing to bet that was the case with MSFT’s release).  It’s also easy to imagine that some innovative companies will build search engines to scour IR websites and aggregate the information in an easy to use format that acts as an equalizer.  I think it’s pretty obvious that social media is only beginning to transform the way we all communicate.  The task we are all faced with is how to use these new tools in a way that benefits both us and our investors while maintaining best practices. 

 

Link to the NYT’s article:  http://dealbook.nytimes.com/2010/11/08/a-lack-of-transparency-in-s-e-c-d...