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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

#171

Post by SilverElfin »

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…

This is a manipulation enabler. I’m surprised no one is mentioning this, but it’ll allow companies like SpaceX and Tesla to avoid scrutiny. The other changes the SEC and NASDAQ are rushing all have donors behind them. That’s how this openly corrupt administration works but it’s also how America has generally operated in the past, only to a smaller degree.

Re: US SEC preparing to scrap quarterly reporting requirement

#172

Post by [deleted] »

nonethewiser wrote: post #159
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.

[deleted]

Re: US SEC preparing to scrap quarterly reporting requirement

#173

Post by drewda »

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…

General Electric has a history of using that exact trick... just with jet engines and power generators and medical devices that can represent much larger amounts of revenue.

Re: US SEC preparing to scrap quarterly reporting requirement

#174

Post by vessenes »

bizzletk wrote: post #158
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?

It’s a common complaint of value investors that boards (especially in this post-Sarbox world) are solely focused on quarterly earnings reports, to the detriment of long term strategy. One way to talk about the added and persistent value of some companies is to note that many of them have powerful, recalcitrant, or somehow anti-quarterly-cadence founders: buffet, zuck, you could make a list.

Re: US SEC preparing to scrap quarterly reporting requirement

#175

Post by cortesoft »

foolfoolz wrote: post #112
donavanm wrote: post #87

Earlier quoted context omitted.

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

This is why Netflix broke up the final season of Stranger Things in such a weird way... they wanted new episodes at the end of quarters, to have good subscriber numbers for the quarter report

Re: US SEC preparing to scrap quarterly reporting requirement

#176

Post by plussed_reader »

jandrewrogers wrote: post #165
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”.

The beauty of it, though, is that it would recover almost immediately as systems arbitrage an obviously stupid situation.

But on what time scale? Before a few connected entities make a profit or after?

Re: US SEC preparing to scrap quarterly reporting requirement

#177

Post by vessenes »

drewda wrote: post #173
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…

General Electric has a history of using that exact trick... just with jet engines and power generators and medical devices that can represent much larger amounts of revenue.

Not just - Welch pioneered using GE Capital to “smooth” earnings - lots of judgment calls in those finance companies in the early 90s.

Re: US SEC preparing to scrap quarterly reporting requirement

#178

Post by skissane »

throw0101c wrote: post #77
skissane wrote: post #67

Earlier quoted context omitted.

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…

> Releasing financial data daily, you are much more likely to release incorrect info and then have to go back and correct it. 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).

If you publicly release incorrect financial results, there is a formal process you have to follow to notify the public that you made an error (“restating results”). But if you catch the error before you release the results, you get to skip all that. Make people release results daily, they’d be restating past results all the time, because they wouldn’t have time to catch errors prior to release.

Re: US SEC preparing to scrap quarterly reporting requirement

#179

Post by vessenes »

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…

And yet, some very, very good public company CEOs like Buffet have carved out worlds where they report thinly and publicly claim they do not manage to quarterly earnings.

Re: US SEC preparing to scrap quarterly reporting requirement

#180

Post by cosmicgadget »

vessenes wrote: post #174
bizzletk wrote: post #158

Earlier quoted context omitted.

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

It’s a common complaint of value investors that boards (especially in this post-Sarbox world) are solely focused on quarterly earnings reports, to the detriment of long term strategy. One way to talk about the added and persistent value of some companies is to note that many of them have powerful, recalcitrant, or somehow anti-quarterly-cadence founders: buffet, zuck, you could make a list.

I mean those personalities are also hyperfocused on share price.
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