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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

#151

Post by JumpCrisscross »

balderdash wrote: post #106

What company doesn’t produce monthly financial statements, let alone quarterly. I could understand this for small caps. I also don’t see how less granularity in financials is a good thing, yes if you have bad quarter that bad (but at least you can make it up the next quarter vs a bad six months likely introduces more volatility (I think?). Also I think one of the biggest complaint is “short termism” in markets, but I…

> don’t see how less granularity in financials is a good thing

Transaction costs. Preparing this transparency costs money and attention.

Re: US SEC preparing to scrap quarterly reporting requirement

#152

Post by jandrewrogers »

mixdup wrote: post #142
jandrewrogers wrote: post #138

Earlier quoted context omitted.

That is an absurd cadence. It is extremely expensive to do this reporting; an an enormous amount of useless activity is slaved to providing it in companies that need to. This is literally a call for more bureaucracy theater. The obvious net effect is that companies would structure themselves to no longer have the reporting requirement, as the cost of reporting exceeds the benefits. That would not benefit society at l…

The reason quarters take so long to close is because the numbers are being fiddled with. There's no reason someone shouldn't be able to close a quarter and report the numbers with the automation we have today in technology, meaning without some magic AI/LLM, other than people are constantly trying to reclassify expenses or income in a way that saves the quarter Why, after 30-40 years of modern computing in accounting…

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 parties as a legal matter.

When I have been in positions where reporting was a necessary part of my job, reporting related activity probably consumed 1/3 of my time. Even in highly optimized contexts, it consumes a stupid amount of time and the impact on the consumers of those reports is often quite low. It is almost a total waste of time.

There should be some reporting but the current cadence and requirements is way too high for many large companies. Reporting doesn't have infinite ROI.

Re: US SEC preparing to scrap quarterly reporting requirement

#153

Post by themafia »

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…

"We risk everyones lives in order to have a barely just-in-time warehouse on shipments in the low 8 figures."

Cool.

What company is this?

Re: US SEC preparing to scrap quarterly reporting requirement

#154

Post by JumpCrisscross »

sashank_1509 wrote: post #22
paxys wrote: post #4

Earlier quoted context omitted.

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-rev…

> overall idea of SPAC’s is not bad

It is. It’s a workaround.

More directly, SPACs are financially engineered to extract wealth from retail. Every weird interest-rate, guaranteed-floor and private-placement provision is geared for it. We have a crap IPO process, in part due to reporting requirements, so sometimes the gamble works out.

Re: US SEC preparing to scrap quarterly reporting requirement

#155

Post by mrcsharp »

motoxpro wrote: post #128
mrcsharp wrote: post #78

Earlier quoted context omitted.

Please read the article. > 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.

Thats exactly what they said

Fair enough. I misunderstood.

Re: US SEC preparing to scrap quarterly reporting requirement

#157

Post by gottorf »

clickety_clack wrote: post #156

24/7 trading sounds like a nightmare. “Your retirement savings crashed 30% because there wasn’t enough liquidity to cover a 3am panic over non-news”.

Honestly, stocks should trade for three hours a day. 24/7 trading sounds like a win for exchange operators and a loss for anyone else.

Re: US SEC preparing to scrap quarterly reporting requirement

#158

Post by bizzletk »

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…

Can you enumerate some examples of when it having less information is better than having more?

Re: US SEC preparing to scrap quarterly reporting requirement

#159

Post by nonethewiser »

ginkoleaf wrote: post #83

This seems like bad news for regular investors, and good news for insiders. Reporting is burdensome, sure, but being listed on public exchanges is not a requirement.

Makes companies short-sighted though. I wouldn't say that's necessarily good for regular investors.

Re: US SEC preparing to scrap quarterly reporting requirement

#160

Post by clickety_clack »

throw0101c wrote: post #53
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…

> 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…

TLS certs are a single certificate. Corporate reporting is an aggregate of different types of numbers in disparate systems summed up through divisions that might as well be different companies.

Although… if there was a software engineering union, swinging a mandate for live public financial reporting is the type of non productive work that would keep everyone in a job.

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