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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

#361

Post by hannasanarion »

kakacik wrote: post #324
fc417fc802 wrote: post #319

Earlier quoted context omitted.

For it to not be fraud you'd have to actually exchange services proportional to the line items. That isn't what was described. Falsifying line items to juice your numbers is fraud plain and simple.

Yet we see it happening all the time with various AI deals.

How? "AI fincancing bad" is starting to seem like a new non sequitur meme. There's no imaginary thing being traded for indefensible valuations in AI dealings. Stock units at a certain valuation exchanged for an equivalant value in hardware is just a standard payment-in-kind transaction.

If the valuation turns out to change in the future, that's the hardware seller's risk.

It's not the same thing as buying a $20 million banana from a bahamian llc secretly owned by yourself, which is fraud.

Re: US SEC preparing to scrap quarterly reporting requirement

#362

Post by epolanski »

anonu wrote: post #358
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.

> being listed on public exchanges is not a requirement it used to be raise money. now that money is done privately. the result exacerbates the gap between private and public markets and ultimately between rich and poor. Private market participation is usually for accredited investors where you need $1m net worth. Public markets are one of the best ways to create wealth in the US, if the historical record is any hint…

> it used to be raise money. now that money is done privately.

Not anymore, private markets are quite illiquid right now.

Re: US SEC preparing to scrap quarterly reporting requirement

#363

Post by epolanski »

lotsofpulp wrote: post #341
nonethewiser wrote: post #159

Earlier quoted context omitted.

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

Where is the proof? All the businesses with the highest demand for their shares are clearly not short-sighted. Share buyers are clearly rewarding investing for the long term, even with quarterly reporting.

> All the businesses with the highest demand for their shares are clearly not short-sighted.

Where is the proof?

As long as CEOs and executives compensation is tied to stock performance, which is highly tied to news and short term results, basic economics and game theory suggests that short-sightedness is indeed encouraged.

This is especially problematic for businesses where plannings have to be done 4/5/6+ years in advance like auto industry, aircrafts or semi conductors.

It takes an awful lot of time and money to plan a new processor architecture and build an ecosystem around it, from chip manufacturing to packaging.

Re: US SEC preparing to scrap quarterly reporting requirement

#364

Post by lotsofpulp »

epolanski wrote: post #363
lotsofpulp wrote: post #341

Earlier quoted context omitted.

Where is the proof? All the businesses with the highest demand for their shares are clearly not short-sighted. Share buyers are clearly rewarding investing for the long term, even with quarterly reporting.

> All the businesses with the highest demand for their shares are clearly not short-sighted. Where is the proof? As long as CEOs and executives compensation is tied to stock performance, which is highly tied to news and short term results, basic economics and game theory suggests that short-sightedness is indeed encouraged. This is especially problematic for businesses where plannings have to be done 4/5/6+ years in…

https://companiesmarketcap.com/

Go down that list and you can see almost all those businesses are ones that plowed and continue to plow billions of dollars into investments that will not pan out for many years.

I don’t think any of the top ones got to where they were with quarter to quarter goals.

Re: US SEC preparing to scrap quarterly reporting requirement

#365

Post by hannasanarion »

fc417fc802 wrote: post #231
baby wrote: post #166

Earlier quoted context omitted.

For the company it doesnt work well, you’re leaking too much info to competitors

If everyone is legally required to share it then we're all in the same boat.

Financials aren't like technology or IP where having the information open to all (perhaps with limited monopolies on usage a la patents) is essentially for the betterment of all mankind, they can be more like order of battle in a war zone.

If your competitors know that your Florida subsidiary is running inefficiently and being subsidized by your successful business elsewhere, they can target their own operations in Florida, undercut you more than you can possibly sustain, force you to exit that market entirely, so that they can monopolize there.

Re: US SEC preparing to scrap quarterly reporting requirement

#366

Post by epolanski »

lotsofpulp wrote: post #364
epolanski wrote: post #363

Earlier quoted context omitted.

> All the businesses with the highest demand for their shares are clearly not short-sighted. Where is the proof? As long as CEOs and executives compensation is tied to stock performance, which is highly tied to news and short term results, basic economics and game theory suggests that short-sightedness is indeed encouraged. This is especially problematic for businesses where plannings have to be done 4/5/6+ years in…

https://companiesmarketcap.com/ Go down that list and you can see almost all those businesses are ones that plowed and continue to plow billions of dollars into investments that will not pan out for many years. I don’t think any of the top ones got to where they were with quarter to quarter goals.

That's not proof of anything and most of the companies you find there are cashing on decades old businesses whether it's oil, ads or iPhones.

Re: US SEC preparing to scrap quarterly reporting requirement

#367

Post by hannasanarion »

aucisson_masque wrote: post #330
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…

If you can't be arsed to ship it before the last day of the report, it's your fault and asking the truck driver to drive like a maniac to compensate is amateurish, dangerous. That's not something I'd be proud of.

It's an extreme example that shortens the time frame and shrinks the cast of characters to illustrate the point.

Substitute "telling the truck driver to run stop signs" with "order the factory to increase production", it's the same thing.

Re: US SEC preparing to scrap quarterly reporting requirement

#368

Post by lotsofpulp »

epolanski wrote: post #366
lotsofpulp wrote: post #364

Earlier quoted context omitted.

https://companiesmarketcap.com/ Go down that list and you can see almost all those businesses are ones that plowed and continue to plow billions of dollars into investments that will not pan out for many years. I don’t think any of the top ones got to where they were with quarter to quarter goals.

That's not proof of anything and most of the companies you find there are cashing on decades old businesses whether it's oil, ads or iPhones.

“Cashing in” is on bets made many years ago is making my point. Amazon didn’t stop once it had the book market or even the online retail market (see AWS), Apple didn’t stop with ipod or iphone (see M processors/Airpods/Watch/etc), Meta didn’t stop with Facebook (see instagram/whatsapp/VR), Alphabet didn’t stop with Google (Waymo, Gmail, Drive), Eli Lilly with GLP-1 trials, etc.

They could stop, and switch to quarter to quarter decision making and juice their numbers even more. Maybe they will, and then eventually those businesses will drop in the rankings (IBM/GE/etc).

But the idea that quarterly reporting makes businesses short sighted is clearly false.

Leaders with short term motivations makes businesses short sighted (obviously). Sometimes, that’s justified because the business sector is winding down, sometimes it’s due to incompetence, and sometimes it’s due to greed.

Re: US SEC preparing to scrap quarterly reporting requirement

#369

Post by jefftk »

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.

This is not correct. A business this big would definitely be using accrual accounting (not cash) which generally means you count the revenue when the actual ownerships transfers to the buyer. Since the truck was operated by the seller, the transfer of ownership is almost certainly counted as when the buyer receives the goods.

Re: US SEC preparing to scrap quarterly reporting requirement

#370

Post by rdtsc »

rpicard wrote: post #348
mock-possum wrote: post #305

Earlier quoted context omitted.

I don’t get it, why not just say “oh we were 15 million short that quarter and 15 million ahead this one so it’s all good” Like why get hung up on these arbitrary cutoffs

This is what confuses me about tech sales too. Why do I always get a discount for buying right at the end of the quarter? Seems like you could just get ahead on the next one.

Because of how performance targets are defined. If sales figures “fell” or didn’t grow at the expected rate it can be worse than having a few more points over next quarter.
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