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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

#111

Post by carlosjobim »

roxolotl wrote: post #46
kshacker wrote: post #18

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…

I have the opposite opinion. More information is always better. Absolutely the reporting requirements are onerous and there already are perverse incentives to chase things quarterly. Reducing reporting requirements is only going to make things worse though. The only solution I can imagine is to instead drop reporting requirements to instant. Make all public companies truly public. Reporting information should to be a…

And now I know why surgeons spend more time filling out paperwork than treating patients.

Now I know why I have to stand for 15 minutes at the hotel reception desk to check in to my already paid room, while the receptionist is typing away.

Now I know why projects which should take one week to complete instead take 5 years.

Re: US SEC preparing to scrap quarterly reporting requirement

#112

Post by foolfoolz »

donavanm wrote: post #87
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…

I worked at a previous listed company where a single $6MM order of hardware being pushed out a week made quarterly p&l positive. Im absolutely sure the same situation occurred every other quarter as well in some part of the business I didnt see.

this kind of deal timeline management happens at all companies. this is why contracts get structured in complicated pricing structures to make it easier for revenue recognition to occur in the quarter it’s supposed to. the timeline can move from 3 months to 6 it’s still going to be a huge focus area for a lot of people at every company

Re: US SEC preparing to scrap quarterly reporting requirement

#113

Post by throw0101c »

jmcgough wrote: post #49
testbjjl wrote: post #35

Earlier quoted context omitted.

I see how it helps you and the company. What about investors who you borrowed money from.

Arguably better for everyone. Too much focus on short-term profits can harm long-term growth.

> Arguably better for everyone. Too much focus on short-term profits can harm long-term growth.

If you think quarterly reporting 'season' is crazy now, wait until it becomes semi-annual and the pressure is really on to hit analyst numbers. It'll be like New Year's Countdown on Results Release Day.

Re: US SEC preparing to scrap quarterly reporting requirement

#114

Post by sashank_1509 »

gzread wrote: post #33
sashank_1509 wrote: post #22

Earlier quoted context omitted.

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-rev…

Have you tried reaching out privately to those companies you want to invest in? Stock trading doesn't only happen on stock markets, and the rationale for publicly traded companies being so regulated is because they're so easy to invest in.

That’s much harder. If it’s a big private company like OpenAI, you need a minimum 50k investment. For smaller companies, the number is much higher I assume.

Re: US SEC preparing to scrap quarterly reporting requirement

#115

Post by throw0101c »

Karrot_Kream wrote: post #110
runako wrote: post #85

Earlier quoted context omitted.

> it would make being a public company even more burdensome than it already is Every company doesn't have to be public. The US taxpayer underwrites US securities markets, and companies that trade on our public markets have access to some of the deepest pools of low-cost liquidity in the world. But companies are obviously free to list elsewhere. > the number of public corporations is already in decline. Separate probl…

When companies stay private longer, private capital stays tied up for longer, decreasing public liquidity and keeping bad private investments afloat for longer. Part of the creative destruction of the dot com bust was the legion of badly performing companies that went public and were thoroughly rejected by public investors, offering an exit to later investors and employees. Right now badly performing companies can li…

> Part of the creative destruction of the dot com bust was the legion of badly performing companies that went public and were thoroughly rejected by public investors, offering an exit to later investors and employees.

That's not how I remember it. I remember lots of publicly traded company shares being gobbled even though their business plans[1] were essentially:

1. Collect underpants

2. ?

3. Profit

"Going for marketshare" and not making a profit was still popular as recently as Uber/DoorDash/etc. Cisco still (AIUI) hasn't reached back to is DotCom peak.

Are the current multiples of many tech stocks sensible?

[1] https://en.wikipedia.org/wiki/Gnomes_(South_Park)

Re: US SEC preparing to scrap quarterly reporting requirement

#117

Post by sashank_1509 »

donavanm wrote: post #93
sashank_1509 wrote: post #22

Earlier quoted context omitted.

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-rev…

Dude. SPACs are structurally a _terrible_ idea for any non-privileged investor. The sponsors 20-25% comp, the early warrants, etc. All of those costs are taken out of the bag-holder, sorry “investors”, expected value. The entire thing is setup to maximise info asymmetry and perverse incentives for the sponsors at the cost of bag holders. The “shitty tactics” _are why SPACs exist_.

Even so, VRT has gone up 2000% since it SPACC’ed. RKLB was also a SPAC. A SPAC is a just a way to satisfy regulations as a pre-revenue early stage company. Most early stage companies fail, and that’s fine.

If such a company succeeds and still retail investors, don’t get paid back, I would consider that fraudulent, but that’s not the case with SPAC’s. I would like to see SPAC deals be better to investors as opposed to banning them entirely.

Re: US SEC preparing to scrap quarterly reporting requirement

#118

Post by Karrot_Kream »

throw0101c wrote: post #115
Karrot_Kream wrote: post #110

Earlier quoted context omitted.

When companies stay private longer, private capital stays tied up for longer, decreasing public liquidity and keeping bad private investments afloat for longer. Part of the creative destruction of the dot com bust was the legion of badly performing companies that went public and were thoroughly rejected by public investors, offering an exit to later investors and employees. Right now badly performing companies can li…

> Part of the creative destruction of the dot com bust was the legion of badly performing companies that went public and were thoroughly rejected by public investors, offering an exit to later investors and employees. That's not how I remember it. I remember lots of publicly traded company shares being gobbled even though their business plans[1] were essentially: 1. Collect underpants 2. ? 3. Profit "Going for market…

I'm having a hard time responding to someone who's using a South Park episode as a discussion point. Like how can I debate a point made by a show that makes content reacting to the popular perception of certain ideas? That's like 2 levels removed from the actual true details.

Anyway the difference now is that those companies still exist they just take round after round of private investor capital and the employees are offered shares that will never be tradable. Were those businesses would go bankrupt in a few years before now they can take 5-10 years. Time value of money being a thing, your money will be locked up for longer in a bad investment than it would on the public markets.

Re: US SEC preparing to scrap quarterly reporting requirement

#120

Post by mcoliver »

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 convoluted but if companies reported dollars in and dollars out live to shareholders at least we would have an idea of how the company is doing in a general sense. And over time would learn the flow of the company and be able to make informed predictions on the overall health of the company. More information is usually better than less with very few exceptions.

If they want to delay the earnings call to every 6 months to talk about the business I have no problems with that.

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