71–80 of 491 posts
Earlier quoted context omitted.
Much larger windows though no? Blackout periods are prior to reporting dates.
Rather, trading periods are for a limited time after reports are released. Before employees accrue too much non public information.
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…
> And it’s not just execs, but the whole corporate machinery that takes 3–6 weeks after quarter end to churn out reports. Release early, release often. If you want corporate machinery to run more smoothly with less effort, force it to operate more frequently not less: when TLS certs had 2-3 year lifespans there was all sorts of manual methods that people forgot how to do; then it was maximum one year. We then got fre…
I get where you're coming from but this is a rough transition for some. Ideally we would hope that more frequent reporting would necessitate development of more seamless systems... but we ain't there yet. There's a lot of flexibility in some systems but they allow that flexibility so that it can be tightened as needed. Be careful.
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What will actually happen is that frauds and poorly run companies will opt for the 6 month schedule while well run ones will keep the 3 month. To your point that "executives should be tracking performance daily", there's an argument that all that data should be publicly released daily. It would make it nearly impossible to hide mismanagement and actually remove most of the human overhead since it would be impossible…
IMO, it would be ok if it was not unconditional. If you have been public for >N years, and have had >X "clean" quarterly reports, no trouble with the SEC, etc, then sure, back off to 6mo (or even yearly, if your shareholders are ok with that). But if you have an audit problem, violate SEC rules, get any kind of conviction, hell, even an inditement, then back to quarterly until you clean it up.
...staff changes happen, incentives change due to changes in business performance. Enron was apparently clean public company from 1985 until sometime after Andrew Fastow was hired in 1990.
If high-resolution transparency has any value, it doesn't make sense to do it a few times and then stop.
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The problem with reporting often is that the reports must each be audited (which is time-intensive and expensive), and any errors subject the companies to class-action lawsuits (which only ever benefit the lawyers, but that is a separate matter). I would also prefer more frequent reports, but only if they were less burdensome and risky.
Longer periods between audited (aka "accurate") results will lead to compounding errors. Fewer people at the company will have a clear idea of how the company is doing. Audits are like CI for finances.
Earlier quoted context omitted.
> And it’s not just execs, but the whole corporate machinery that takes 3–6 weeks after quarter end to churn out reports. Release early, release often. If you want corporate machinery to run more smoothly with less effort, force it to operate more frequently not less: when TLS certs had 2-3 year lifespans there was all sorts of manual methods that people forgot how to do; then it was maximum one year. We then got fre…
The problem with reporting often is that the reports must each be audited (which is time-intensive and expensive), and any errors subject the companies to class-action lawsuits (which only ever benefit the lawyers, but that is a separate matter). I would also prefer more frequent reports, but only if they were less burdensome and risky.
The "audit" certifies a certain hash of a repo that produces known-good results, and if you use a different commit in that repo you have explain in an SEC filing why you modified things.
Basically reproducible builds for financial results:
Earlier quoted context omitted.
> And it’s not just execs, but the whole corporate machinery that takes 3–6 weeks after quarter end to churn out reports. Release early, release often. If you want corporate machinery to run more smoothly with less effort, force it to operate more frequently not less: when TLS certs had 2-3 year lifespans there was all sorts of manual methods that people forgot how to do; then it was maximum one year. We then got fre…
The problem with reporting often is that the reports must each be audited (which is time-intensive and expensive), and any errors subject the companies to class-action lawsuits (which only ever benefit the lawyers, but that is a separate matter). I would also prefer more frequent reports, but only if they were less burdensome and risky.
Earlier quoted context omitted.
What will actually happen is that frauds and poorly run companies will opt for the 6 month schedule while well run ones will keep the 3 month. To your point that "executives should be tracking performance daily", there's an argument that all that data should be publicly released daily. It would make it nearly impossible to hide mismanagement and actually remove most of the human overhead since it would be impossible…
Releasing data at regular intervals gives people time to review the data, identify mistakes and rectify them. Releasing financial data daily, you are much more likely to release incorrect info and then have to go back and correct it. For certain types of firms, daily revenue figures are likely to reveal individual deals. Many B2B firms have a modest number of high value deals, a daily data feed might show $0 revenue…
Why do you need to "go back"? The corrected data would be available the very next day (or month (or week or fortnight) if you don't want to go to that extreme).
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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.
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.
> The WSJ report added that the rule is expected to make quarterly reporting optional and not eliminate it altogether.
So companies can still do their quarterly reporting if they and their investors want that.
Earlier quoted context omitted.
What will actually happen is that frauds and poorly run companies will opt for the 6 month schedule while well run ones will keep the 3 month. To your point that "executives should be tracking performance daily", there's an argument that all that data should be publicly released daily. It would make it nearly impossible to hide mismanagement and actually remove most of the human overhead since it would be impossible…
IMO, it would be ok if it was not unconditional. If you have been public for >N years, and have had >X "clean" quarterly reports, no trouble with the SEC, etc, then sure, back off to 6mo (or even yearly, if your shareholders are ok with that). But if you have an audit problem, violate SEC rules, get any kind of conviction, hell, even an inditement, then back to quarterly until you clean it up.
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?