Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

US SEC preparing to scrap quarterly reporting requirement

reuters.com

Post reply on HN
Print view View original

221–230 of 491 posts

Re: US SEC preparing to scrap quarterly reporting requirement

#221

Post by mcoliver »

gotwaz wrote: post #209
mcoliver wrote: post #120

Simultaneously they are opening up 0DTE options on certain stocks starting with large market caps but don't be surprised when this expands. Currently this was limited to large etfs like SPX. They are also extending trading hours towards 24/7 and eventually 365. How they square increasing liquidity with delaying information is insane. I know there is a lot of manipulation to make quarterly numbers and the tax code is…

Homework - What does Shannon Information Theory say about too much info beyond channel capacity?

Sure but I should add I'm not saying this should be done in place of current reporting. It should be done in addition to. I'm advocating for more transparency augmented with periodic storytelling. Over time that noise becomes the pulse of the company.

Wrt Shannon, the channel capacity today vastly exceeds that of 1934 when quarterly reporting became standard. Give me more data and a filter any day over a once every 6 month black box. 6 month reporting is undersampling.

Re: US SEC preparing to scrap quarterly reporting requirement

#222

Post by mattclarkdotnet »

ghufran_syed wrote: post #192
b40d-48b2-979e wrote: post #163

Earlier quoted context omitted.

Okay, what's that to say it won't be the same but even worse on a 6mo reporting schedule?

as the time period gets longer, the the more likely it is that the numbers represent the true performance of the business rather than randomness. That has to be balanced against the fact that investors get less frequent updates i.e. the information is now potentially 6 months out of date rather than 3 months at worst. But then its just a judgment call of the relative benefit of each - you could argue that with modern…

In every sales-led company quarter end is a shitshow. It'll be even worse if there's only one chance to bring the numbers back in instead of 2 or 3. It's used to put pressure on sales teams, but the net result over the year is never good because it sours relationships and reduces overall deal value.

The best thing would be continuous daily or weekly reporting with no defined year end. Unfortunately the entire global system of tax and accounting is set up around annual reporting, so change is impossible.

Re: US SEC preparing to scrap quarterly reporting requirement

#223

Post by [deleted] »

gotwaz wrote: post #209
mcoliver wrote: post #120

Simultaneously they are opening up 0DTE options on certain stocks starting with large market caps but don't be surprised when this expands. Currently this was limited to large etfs like SPX. They are also extending trading hours towards 24/7 and eventually 365. How they square increasing liquidity with delaying information is insane. I know there is a lot of manipulation to make quarterly numbers and the tax code is…

Homework - What does Shannon Information Theory say about too much info beyond channel capacity?

[deleted]

Re: US SEC preparing to scrap quarterly reporting requirement

#224

Post by fc417fc802 »

colechristensen wrote: post #202
logicallee wrote: post #164

Earlier quoted context omitted.

one per week should do it.

I'd settle for once per second. There's a lot of very fast trading nonsense which I've only heard defended with the "liquidity" bogeyman. A sealed-bid uniform-price batch auction seems like the right action.

Even once per second seems like overkill. That interval would still largely just facilitate the weaponization of exceedingly low information latency.

30 seconds seems reasonable, 1 minute better, and 5 minutes still better. In all honesty even going as long as 30 minutes should still facilitate all legitimate purposes.

Re: US SEC preparing to scrap quarterly reporting requirement

#225

Post by jandrewrogers »

Dylan16807 wrote: post #213
jandrewrogers wrote: post #152

Earlier quoted context omitted.

This is a naive view of what reporting entails and the difficulty of coalescing a report that meets the requirements of the audience the report is for. It isn't a numbers dump from a database, it requires substantial interpretation of things that the database does not and cannot contain. It isn't fiddling with the numbers, it is that the numbers can't contain things relevant to their representation for external parti…

Why can't that interpretation be done earlier in the process and then put into the database? Isn't it the same amount of transactions to be interpreted no matter what the reporting period is?

Do you understand that as a legal matter these must be good faith representations of the current state to the best of your knowledge? You can’t serve up intentionally stale information without inviting legal repercussions. The preparation process takes weeks. This is a very serious legal matter.

These are being revised and updated right up until the point they are released to provide the most accurate reporting possible.

You gravely underestimate the legal seriousness of these reports.

Re: US SEC preparing to scrap quarterly reporting requirement

#226

Post by mattclarkdotnet »

throw0101c wrote: post #36

This idea goes back several years, and Barry Ritholtz had thoughts on it back in 2015: > Back to quarterly earnings. Why do we even require them in the first place? The answer is that thanks to the transparency provided by regularly reported earnings and profits, investors can make informed decisions about which stocks to own or avoid. Owners of public companies have hired managers to run the businesses for them, and…

Exactly! Continuous reporting reduces the stupid gaming of quarterly results. Weekly would be best as anything longer still gives sales teams enough time to rig the game as they do currently. I'd also get rid of fixed year ends for tax purposes and replace them with continuous trailing 12-month assessments.

Re: US SEC preparing to scrap quarterly reporting requirement

#227

Post by bluecalm »

wholinator2 wrote: post #181
logicallee wrote: post #164

Earlier quoted context omitted.

one per week should do it.

Honestly what would happen if the stock market didn't exist. It seems like these days the price of stock is so disconnected from lived reality that genuinely confused if it would be all that catastrophic

It's not disconnected from reality. You just don't understand it.

If the stock market didn't exist you would have less opportunities to invest in well priced companies and people would be manipulated in investing in opaque, often ridden with accounting shenanigans things like private equity.

The more companies are public and subject to price discovery done by sophisticated players the better it is for uninformed players like normal investors but also less sophisticated informed players like pension funds.

Re: US SEC preparing to scrap quarterly reporting requirement

#228

Post by fc417fc802 »

ang_cire wrote: post #201
mcoliver wrote: post #194

Earlier quoted context omitted.

Help me understand what you are saying here. For those that don't know this one is "a measure becomes a target, it ceases to be a good measure". I'm not advocating for a single metric that can be gamed. A business is fundamentally about dollars in and dollars out. Maybe add receivables in there and a few other metrics from the P&L. I'm not trying to be prescriptive here on purely cash in and out. I do think there is…

Dollars/receivables in and dollars/deliverables out is just a question of rate, unless I'm missing something. If a 10 billion dollar company has a per-second dollar out/in rate of $1,000,000 due to actual organic business, a company with $2,000,000 can set up an LLC it buys and sells from, and legally 'swap' $1,000,000 a second back and forth in services "bought and sold" to mimic the appearance of the $10B company,…

I'm fairly certain you're describing fraud.

Re: US SEC preparing to scrap quarterly reporting requirement

#229

Post by egl2020 »

fourseventy wrote: post #162
alexpotato wrote: post #69

One of my favorite stories about logistics and quarterly earnings deadlines (from when I worked at a pharmaceutical company: "In our business, a truckload of various drugs can easily reach $10-$15 million. Now, if that truck arrives at the depot at 11:59pm March 31st then it's first quarter earnings. If it arrives at 12:01am April 1st then it's second quarter earnings. $15 million is a BIG shortfall, even for us, so…

That doesn't make any sense because the revenue is already booked for the sale which has nothing to do with when the delivery truck actually arrives.

Accounts receivable, revenue, and cash are related, but separate, accounting items.

Re: US SEC preparing to scrap quarterly reporting requirement

#230

Post by vasco »

dragonwriter wrote: post #220
gzread wrote: post #211

Earlier quoted context omitted.

but you just don't sell and wait until the liquidity comes in and prices return to normal at 9am, no?

Significantly large fluctuations, even if largely irrational themselves, can cause effects which have durable impacts on value.

Give an example don't leave us hanging. I'm really curious how you can find an example of a temporary market liquidity move turning somehow into a long term adverse event for a company. Never heard of it
Post reply on HN