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The norm in other countries is 6 months. That's enough time to get the mid-year numbers to be reviewed by an auditor.
I don't think malice of the decision.
US SEC preparing to scrap quarterly reporting requirement
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Re: US SEC preparing to scrap quarterly reporting requirement
#22It would be interesting to see if reducing reporting requirements allows more startups to go public earlier in their journey, hence opening up more opportunities for public to participate in the upside!
Just look at the track record of SPACs for a preview of how that will turn out.
I think it’s still fine. I’ve invested a lot into some SPAC’s. I’m good on 1, break even on the other. And I’ll keep holding it, since these companies are still pre-revenue and I hope they 100X.
The overall idea of SPAC’s is not bad, even if Chamath only created them to exit his sh*t investments. There are very few other ways for retail investors to invest in potential 100-1000X companies (which are generally pre-revenue). Of course the flip side, is that most SPAC’s might close down and cause you to lose money. That is the decision for the investor to make, risky opportunities are fine! Sadly chamaths shitty tactics to close out his investments have tainted a completely fine idea.
Re: US SEC preparing to scrap quarterly reporting requirement
#23If 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.
They all grow by acquisitions, if you want smaller privately owned companies then you also need a strong anti-trust body.
Re: US SEC preparing to scrap quarterly reporting requirement
#24While this will hopefully stop incentivizing companies to focus on super short term results its also going to increase the amount of financial reporting fraud because the remaining reports will become even more important.
Re: US SEC preparing to scrap quarterly reporting requirement
#25I could give the benefit of the doubt to any other administration doing it.
This one? I really have a hard time thinking it's nothing else then another grifting scheme.
Re: US SEC preparing to scrap quarterly reporting requirement
#26This 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.
It would be bad in that it makes employees' stock less liquid. Stock-based compensation is a huge part of many employees' comp packages.
I think a small subset of people might adopt a short-term approach to equity ownership. I think a much larger subset would simply be selling to access the money they rightfully earned or to diversify their holdings instead of having the bulk of their stock portfolio in a single company.
What if someone froze half of your paycheck and said you can't touch it except for the two months out of the year that they say you can?
Re: US SEC preparing to scrap quarterly reporting requirement
#27This 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.
> now they can easily hide nasty things.
For 6 months instead of 3. One could argue the need to show quarterly growth forces companies to do nastier things. Long term thinking is definitely needed these days when all companies are only focusing on short term gains.
Before 1970, the reporting was twice a year and in the first half of the twentieth century it was once a year.
Re: US SEC preparing to scrap quarterly reporting requirement
#28[flagged]
The norm in other countries is 6 months. That's enough time to get the mid-year numbers to be reviewed by an auditor. I don't think malice of the decision.
At least what I saw, which might be inaccurate, is that in countries with 6 month mandatory reporting, most companies still choose to report quarterly or investors start to get nervous.
Re: US SEC preparing to scrap quarterly reporting requirement
#29If you want to discourage short-term thinking, make the vesting period longer on executive stock grants. Making companies' performance less transparent just opens up more opportunities for insider trading.
Re: US SEC preparing to scrap quarterly reporting requirement
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