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US SEC preparing to scrap quarterly reporting requirement

reuters.com

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Re: US SEC preparing to scrap quarterly reporting requirement

#11

Post by Gigachad »

deadbabe wrote: post #7

If you have earnings too frequently, it encourages companies to become hyper focused on earnings and make less long term investments. But if there is too much gap in between earnings, there is potential for grifting. What to do?

Encourage more smaller privately owned companies rather than massive megacorps.

Re: US SEC preparing to scrap quarterly reporting requirement

#12

Post by paxys »

mslate wrote: post #5

This means that employees would only be able to sell their stock 2 windows a year where they currently can sell 4 windows a year, correct?

There is no law regarding how and when (non-exec) employees can sell company stock. The SEC only restricts insider trading, and some companies voluntarily enforce blackout periods to reduce the chance of insider trading. Plenty of public companies (e.g. Microsoft) let employees trade whenever they want.

Re: US SEC preparing to scrap quarterly reporting requirement

#13

Post by dzonga »

mslate wrote: post #5

This means that employees would only be able to sell their stock 2 windows a year where they currently can sell 4 windows a year, correct?

in the UK this is kinda the policy.

however the bigger issue here - is this is a ruse - there is a reason quarterly reporting brought transparency to companies - now they can easily hide nasty things.

you as an employee with stock options - yeah those are close to worthless since the price hit you can take can vary a lot.

Re: US SEC preparing to scrap quarterly reporting requirement

#14

Post by lambdasquirrel »

mslate wrote: post #5

This means that employees would only be able to sell their stock 2 windows a year where they currently can sell 4 windows a year, correct?

Would that necessarily be a bad thing? I remember how that would drive short-termism on the part of regular employees. Since stock comp was a major part of many companies' salaries, people would hope for a bump in the earnings report. We complain about short-termism in the markets, but you can't say one thing and then do something else.

Re: US SEC preparing to scrap quarterly reporting requirement

#16

Post by calstad »

mslate wrote: post #5

This means that employees would only be able to sell their stock 2 windows a year where they currently can sell 4 windows a year, correct?

That depends on your company, not the SEC. I work for a publicly traded company and have very few blackouts, mostly around earnings, for selling.

Re: US SEC preparing to scrap quarterly reporting requirement

#17

Post by thinkingtoilet »

deadbabe wrote: post #7

If you have earnings too frequently, it encourages companies to become hyper focused on earnings and make less long term investments. But if there is too much gap in between earnings, there is potential for grifting. What to do?

I highly doubt semi-annual reporting will shift the focus from the short term profits at all costs thinking that prevails today.

Re: US SEC preparing to scrap quarterly reporting requirement

#18

Post by kshacker »

This is an awesome move. They’re not saying the reports go away—just moving them to every six months. After hating how each company runs on an internal quarterly cycle, I have to welcome it despite how the change originated. Six months is still short from the perspective of perverse incentives, but if you free up one week of charade from execs every 13 weeks, maybe they can focus better.

And it’s not just execs, but the whole corporate machinery that takes 3–6 weeks after quarter end to churn out reports. Of course, internally executives should be tracking performance daily, but the quarter-end panic could lessen. If you have a bad quarter, you’re not penalized as much if the surrounding months are good.

And anyway, if there is a material adverse change the companies should be expected to disclose, like they are expected now.

Ps: I posted the same on Reddit a couple of hours back. Not AI but if you do find the account don't mention them online in the same sentence.

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