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US SEC preparing to scrap quarterly reporting requirement

• ashraymalhotra 7mo ago
  It would be interesting to see if reducing reporting requirements allows more startups to go public earlier in their journey, hence opening up more opportunities for public to participate in the upside!
  • paxys 7mo ago
    Just look at the track record of SPACs for a preview of how that will turn out.
    • sashank_1509 7mo ago
      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-revenue). Of course the flip side, is that most SPAC’s might close down and cause you to lose money. That is the decision for the investor to make, risky opportunities are fine! Sadly chamaths shitty tactics to close out his investments have tainted a completely fine idea.
      • gzread 7mo ago
        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.
        • sashank_1509 7mo ago
          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.
          • gzread 7mo ago
            Yes. Can you really invest only 50k into OpenAI? That seems low to me. However, some small companies are okay with small investments. You have to negotiate privately, that's just how it is. If it was a simple, uniform process, they'd be on the stock market.
      • jordanb 7mo ago
        > 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 "I have this exciting bag-holding opportunity for you."
      • donavanm 7mo ago
        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_.
        • sashank_1509 7mo ago
          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.
      • JumpCrisscross 7mo ago
        > 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.
  • jrochkind1 7mo ago
    Can you connect the dots for me, why would reduced reporting requirements allow more startups to go public earlier?
    • cj 7mo ago
      Some people argue that the requirements placed on public companies (like mandatory quarterly reporting) add operational overhead that might cause a company to postpone an IPO until they're larger or more established. In practice, companies like Stripe, OpenAI, etc have stayed private because they've been able to access the cash they need at valuations they're happy with and because no one wants to open their books unless they have to. They aren't staying private because being a public company is hard.
    • jordanb 7mo ago
      Combining this with a SPAC a startup would be able to have a six month runway as a public company before having to disclose finances. I imagine that would be attractive to some firms.
      • donavanm 7mo ago
        Weird, why wouldnt this fantastic startup want to report on their performance in a standardized and accountable manner for six months after collecting public money to pay out insiders and “sponsors”? Surely they wouldnt mind bragging about their fantastic GAAP P&L in their filing docs. Maybe its the pesky quiet period theyre trying to avoid, so they can be even more transparent about finances and equity holders.
  • gnulinux996 7mo ago
    But mostly downside
• dboreham 7mo ago
  That was easy.
• mslate 7mo ago
  This means that employees would only be able to sell their stock 2 windows a year where they currently can sell 4 windows a year, correct?
  • paxys 7mo ago
    There is no law regarding how and when (non-exec) employees can sell company stock. The SEC only restricts insider trading, and some companies voluntarily enforce blackout periods to reduce the chance of insider trading. Plenty of public companies (e.g. Microsoft) let employees trade whenever they want.
  • dzonga 7mo ago
    in the UK this is kinda the policy. however the bigger issue here - is this is a ruse - there is a reason quarterly reporting brought transparency to companies - now they can easily hide nasty things. you as an employee with stock options - yeah those are close to worthless since the price hit you can take can vary a lot.
    • darth_avocado 7mo ago
      > now they can easily hide nasty things. For 6 months instead of 3. One could argue the need to show quarterly growth forces companies to do nastier things. Long term thinking is definitely needed these days when all companies are only focusing on short term gains. Before 1970, the reporting was twice a year and in the first half of the twentieth century it was once a year.
  • lambdasquirrel 7mo ago
    Would that necessarily be a bad thing? I remember how that would drive short-termism on the part of regular employees. Since stock comp was a major part of many companies' salaries, people would hope for a bump in the earnings report. We complain about short-termism in the markets, but you can't say one thing and then do something else.
    • giwook 7mo ago
• shablulman 7mo ago
  [dead]
• deadbabe 7mo ago
  If you have earnings too frequently, it encourages companies to become hyper focused on earnings and make less long term investments. But if there is too much gap in between earnings, there is potential for grifting. What to do?
  • Gigachad 7mo ago
    Encourage more smaller privately owned companies rather than massive megacorps.
    • pixelatedindex 7mo ago
      They all grow by acquisitions, if you want smaller privately owned companies then you also need a strong anti-trust body.
      • thayne 7mo ago
        Yes. That is what I want.
      • gzread 7mo ago
        We could keep making companies they want to acquire until they run out of money to acquire them with.
    • heliumtera 7mo ago
      So either big companies would lobby against their interest, or SEC would do something independently. Honestly I cannot decide which one is more absurd.
  • thinkingtoilet 7mo ago
    I highly doubt semi-annual reporting will shift the focus from the short term profits at all costs thinking that prevails today.
  • Terr_ 7mo ago
    Report very frequently, then use a moving-window average for any sharp questions of tax and legislation?
• senkora 7mo ago
  > The U.S. Securities and Exchange Commission is preparing a proposal to scrap the requirement for companies to report their earnings every quarter and giving them the option to share results twice a year So, at least twice a year would still be mandatory until this change.
• Gigachad 7mo ago
  [flagged]
  • nevi-me 7mo ago
    The norm in other countries is 6 months. That's enough time to get the mid-year numbers to be reviewed by an auditor. I don't think malice of the decision.
    • Gigachad 7mo ago
      At least what I saw, which might be inaccurate, is that in countries with 6 month mandatory reporting, most companies still choose to report quarterly or investors start to get nervous.
      • ee64a4a 7mo ago
        Hard to disentangle that from quarterly being the US standard, what with it being the most robust capital markets and nexus of major financial transactions.
      • mrcsharp 7mo ago
        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.
        • motoxpro 7mo ago
          Thats exactly what they said
          • mrcsharp 7mo ago
            Fair enough. I misunderstood.
    • deleted 7mo ago
      [deleted]
• gucci-on-fleek 7mo ago
  Does anyone have any guesses about how most companies would react to this? Will most keep publishing quarterly reports, will most switch to semiannual reports, or will it be a 50/50 split? Or are the major stock exchanges likely to continue mandating quarterly reports?
  • IgorPartola 7mo ago
    Most large companies will continue quarterly reporting because institutional investors will not accept anything else. For a company with market cap of $500m spending $1-2m yearly on quarterly audits is non-trivial. For a company that’s $5b and up that’s not much at all. This is also not a done deal and large pension funds will oppose this hard during the public comment portion of this process.
  • RA_Fisher 7mo ago
    I think they'll keep the status quo of quarterly, bc if any announce switching I'd expect their stock value to fall (bc in my mind the decision would transmit more bad potential than positive potential for future earnings). ie- I don't buy that quarterly reporting drives too short-term decision-making (or that it's generally too short).
  • heliumtera 7mo ago
    If some random company known to be the biggest money furnace that ever existed decides to do an initial Public offering, and continues to be the biggest money furnace that ever existed with no hopes of revenue...would that hypothetical company prefer to report the damages earlier than later? Nobody knows about most companies, but either a big big public company will benefit from this, or a soon to be public company will benefit from this.
• readthenotes1 7mo ago
  European companies report every 6 months and it doesn't seem to do any harm
  • Vaslo 7mo ago
    This is a really key point - it’s already working fine elsewhere.
  • throw0101c 7mo ago
    The UK went back and forth on it: > Beginning in 2007, UK public companies were required to issue quarterly, rather than semiannual, financial reports. But the UK removed this quarterly reporting requirement in 2014. We studied the effects of these regulatory changes on UK public companies and found that the frequency of financial reports had no material impact on levels of corporate investment. However, mandatory quarterly reporting was associated with an increase in analyst coverage and an improvement in the accuracy of analyst earnings forecasts. * https://rpc.cfainstitute.org/research/foundation/2017/impact-of-reporting-frequency-on-uk-public-companies https://rpc.cfainstitute.org/research/foundation/2017/impact... So it seems that if you want more accurate analysis for investors (and current stock holders), more frequent is better.
• kshacker 7mo ago
  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 the whole corporate machinery that takes 3–6 weeks after quarter end to churn out reports. Of course, internally executives should be tracking performance daily, but the quarter-end panic could lessen. If you have a bad quarter, you’re not penalized as much if the surrounding months are good. And anyway, if there is a material adverse change the companies should be expected to disclose, like they are expected now. Ps: I posted the same on Reddit a couple of hours back. Not AI but if you do find the account don't mention them online in the same sentence.
  • testbjjl 7mo ago
    I see how it helps you and the company. What about investors who you borrowed money from.
    • jmcgough 7mo ago
      Arguably better for everyone. Too much focus on short-term profits can harm long-term growth.
      • throw0101c 7mo ago
        > 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.
  • brendanyounger 7mo ago
    What will actually happen is that frauds and poorly run companies will opt for the 6 month schedule while well run ones will keep the 3 month. To your point that "executives should be tracking performance daily", there's an argument that all that data should be publicly released daily. It would make it nearly impossible to hide mismanagement and actually remove most of the human overhead since it would be impossible to spin bad data on a daily basis.
• gamblor956 7mo ago
  While this will hopefully stop incentivizing companies to focus on super short term results its also going to increase the amount of financial reporting fraud because the remaining reports will become even more important.
• p-o 7mo ago
  I could give the benefit of the doubt to any other administration doing it. This one? I really have a hard time thinking it's nothing else then another grifting scheme.
  • welcome_dragon 7mo ago
    Sadly same.
• ralph84 7mo ago
  If you want to discourage short-term thinking, make the vesting period longer on executive stock grants. Making companies' performance less transparent just opens up more opportunities for insider trading.
  • cheriot 7mo ago
    Agree and make it two years for long term capital gains.
  • hammock 7mo ago
    Harder to attract talent though (not saying you’re wrong)
  • DesaiAshu 7mo ago
    Could also price in negative externalities of short term trading with higher taxes for that behavior, nudging the markets to focus on value driving investments rather than speculation
    • duskdozer 7mo ago
      Like short term vs long term capital gains tax rates?
      • DesaiAshu 7mo ago
        Either that or implement it at the exchange level. Eg. if accredited investors sell a stock in <3 months, you pay X% as a tax at the moment of sale - or maybe different fees for <1 hour, <1 month, <1 year
  • busterarm 7mo ago
    The problem isn't the executives, it's the boards. But board members are largely just a proxy for the large shareholders anyway. E.g., short-term investment strategies are not going away. Working C-levels would almost always much rather take the longer view against the wishes of their boards.
• biang15343100 7mo ago
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• throw0101c 7mo ago
  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 they want to see with some consistency how healthy the companies that they own actually are. If there are issues with how the business is being managed by the hired corporate executives, the owners want to know sooner rather than later -- and to have a chance to make course corrections. Quarterly numbers allow that to happen. * https://web.archive.org/web/20151008083649/http://www.bloombergview.com/articles/2015-08-20/wrong-fix-for-short-term-corporate-thinking https://web.archive.org/web/20151008083649/http://www.bloomb... * Via: https://ritholtz.com/2015/08/worst-idea-ever/ https://ritholtz.com/2015/08/worst-idea-ever/ And in 2018 he suggested going in the opposite direction—more frequent—to even daily reporting: > This is exactly backward: More frequent reporting makes the data less significant. In the real world, human behavior emphasizes what occurs less often—meaning doing something less frequently gives it an even greater significance than something that becomes routine or common. > That is the difference between a New Year’s Eve celebration and a married couple’s weekly date night. > Twice-a-year earnings reporting will make the event so momentous, with such focus on it, that any company that misses analysts’ forecasts will find their stock price shellacked. The twice-yearly focus on making the per-share number will become overwhelmingly intense. > This is counterproductive. > My proposal: Report earnings monthly, with the goal of eventually moving to a near real-time, daily, fundamental update. Technology is improving to the point where business intelligence software and big data analyses will make this automated. Indeed, some companies already do much of this internally. > Once financial reporting becomes daily, the short-term earnings obsession will all but disappear. In its place will be a focus on broader profit trends and deeper analytics. […] > The bottom line is so obvious: To make quarterly earnings less important, we should be exploring ways to report results more often, not less. * https://www.fa-mag.com/news/reporting-profits-daily-would-end-short-termism-40430.html?section=232&page=1 https://www.fa-mag.com/news/reporting-profits-daily-would-en...
  • hammock 7mo ago
    I have worked in an industry (QSR) where it is commonplace that damn near the entire company is copied on a DAILY email of system-wide sales reports, and let me tell you you, it was NOT A GOOD THING.
• _--__--__ 7mo ago
  so all EDGAR APIs need to be updated to support either 10-Q or 10-H per firm?
  • consumer451 7mo ago
    Lol. This is the correct take.
• cheriot 7mo ago
  Congratulations to the CEOs of fraudulent companies. > Trump, who first floated the idea in his first term as president, has argued the change in requirements would discourage shortsightedness from public companies while cutting costs. Having less information does not change one's time horizon. It just means large investors paying for proprietary data will have more edge.
• deleted 7mo ago
  [deleted]
• MattCruikshank 7mo ago
  I hear there's no legislation called "Protecting Unified Monetary Products & Distributing Usury Monetary Profits." In this new legislation, some stocks will not be associated with any corporations. There will be no reporting requirements. The stock will move as the market dictates. And people who have more money than you can buy access to trade it seconds faster than you can. Good luck everyone! I hope the PUMP & DUMP bill works out!
• alexpotato 7mo ago
  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 you better believe those truck drivers will roll the stop signs, blow red lights etc to make sure that truck arrives before 11:59pm"
  • donavanm 7mo ago
    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.
    • foolfoolz 7mo ago
      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
      • cortesoft 7mo ago
        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
    • barbazoo 7mo ago
      Sounds more realistic than a low level truck driver running stop signs.
  • golfer 7mo ago
    Early in my career I worked at a place where the sales people would half-joke about signing deals on December 40th -- to claim it in the previous quarter/year.
• ginkoleaf 7mo ago
  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.
  • nonethewiser 7mo ago
    Makes companies short-sighted though. I wouldn't say that's necessarily good for regular investors.
    • deleted 7mo ago
      [deleted]
    • Salgat 7mo ago
      I wonder if requiring it twice a month would fix both issues, since it's too frequent to plan around (versus quarterly), while frequent enough to allow transparency (versus annually).
    • lotsofpulp 7mo ago
      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.
      • epolanski 7mo ago
        > 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.
        • 7mo ago
• vicchenai 7mo ago
  [dead]
  • rtrgrd 7mo ago
    Can we please flagban
• CamelCaseName 7mo ago
  Why yes, I love having less information to critical financial decisions on. I wonder who this benefits, the people with non public information, or the every day person?
• georgeecollins 7mo ago
  The SEC is not the only one who gets a say. Their are rules that SEC does not require that have been required for certain exchanges or indices. For example, no dual class shareholders or certain board compositione have been required for listing. Let's have an exchange or heck , even an ETF require quarterly reporting. I would invest in that and I am sure many wouldn't. It will trade at a premium or it won't.
• balderdash 7mo ago
  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 hardly think that will make much of a difference.
  • JumpCrisscross 7mo ago
    > don’t see how less granularity in financials is a good thing Transaction costs. Preparing this transparency costs money and attention.
    • sneak 7mo ago
      Having to do it more and more frequently means more and more of it gets automated.
      • Esophagus4 7mo ago
        It is not a technology problem. The data generation is mostly automated.
    • balderdash 7mo ago
      As i mentioned those cost are real for small public companies, and while potentially tens of millions a year for large ones its a rounding error for them (e.g. MSFT spent ~$80m/yr on Deloitte the past couple of years for audit work, let's assume it also cost MSFT another $80m/yr on internal support for an annual cost of $160m) that would 0.15% of their net income and meaningless number in relation to the liquidity provided to the ~$3t worth of equity holders by being public. Also I'm not sure going to half year would meaning fully change that number a lot, $130m? the audit is annual with limited review of quarterly financials so there is not a ton of savings
      • 7mo ago
• divbzero 7mo ago
  Twice a year is the current requirement in the UK and still provides a regular cadence.
• mcoliver 7mo ago
  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.
  • bizzletk 7mo ago
    Can you enumerate some examples of when it having less information is better than having more?
    • shermantanktop 7mo ago
      When your decisions are driven by fear, anxiety and FOMO, knowing less can lead to fewer irrational reactions. That’s why people hide information from bad bosses.
    • baby 7mo ago
      For the company it doesnt work well, you’re leaking too much info to competitors
      • mcoliver 7mo ago
        Maybe. I'l am also not saying they need to say where the dollars came from, went to, or what they were for. Aggregate daily flows. Could you do some deductive reasoning to make an informed guess especially when large sums are involved? Perhaps. I am also of the (perhaps wrong) opinion that the majority of the important stuff leaks anyways, just not on a level playing field.
• heliumtera 7mo ago
  This certainly has nothing to do with money furnace AI companies incoming IPO and iminent private credit crash.
• munk-a 7mo ago
  Isn't the quarterly report one of the specific things that AI was sold as making much easier to compile and distribute? I have a strong concern about this happening under the current admin.
• mindcrime 7mo ago
  ... has argued the change in requirements would discourage shortsightedness from public companies while cutting costs. Skeptics, however, caution delaying disclosures could reduce transparency and heighten market volatility. It's a conundrum, for sure. But as much as it pains me to agree with Donald Trump on anything, I think this may be the right thing to do. Something that could help reduce the short-term thinking that is so prevalent in American business today sounds like a win to me. But I won't deny that there are tradeoffs.
• clickety_clack 7mo ago
  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”.
  • gottorf 7mo ago
    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.
    • clickety_clack 7mo ago
      Maybe even just a single auction in the afternoon.
      • logicallee 7mo ago
        one per week should do it.
        • wholinator2 7mo ago
          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
          • stogot 7mo ago
            I hypothesize all dividends, no share value. How would that world look
            • fsckboy 7mo ago
              that makes no sense. companies need capital, that's why there is a stock market. dividends are paid from past earnings, never capital (earnings are only a %age of the value of the capital) and not from higher expectations of the future.
• elAhmo 7mo ago
  It seems like people in power in the US are competing to make as much damage as possible to systems that brought them so much wealth.
  • 20after4 7mo ago
    It's almost as if they aren't considering the best interests of the public or the government/economy that they are dismantling.
  • rjbwork 7mo ago
    They are the winners. They want to stay the winners. So they are incentivized make sure that nobody else can climb up to challenge them.
  • deleted 7mo ago
    [deleted]
  • joquarky 7mo ago
    Something is coming so it's all smash and grab.
    • OhioMan2943 7mo ago
      What something?
      • GolfPopper 7mo ago
        Look at the factors in play: -8 billion human beings -the continuing health impacts of COVID -increased frequency and magnitude of destructive weather events -global weather pattern shifts -increasingly dysfunctional governments in previously stable nations -markets dominated by players decoupled from reality -a stock market bubble of immense proportions -the end of the post-WWII order -an interlinked global economy with very little resilience -an increasing amount of war I have no idea what shape the world that emerges from all the above is going to be, but I strongly doubt it will be better than it was. The obvious analogs seem to be the Great Depression and the World Wars. I don't know exactly what will start the dominoes falling, but the current war in Persian Gulf has a lot of potential to do so.
• resters 7mo ago
  ultimately supply and demand should result in less demand for the stock of companies that do not provide adequate transparency about results. Supporters of the idea would likely say: "But considering that stock price crashes result in government bailouts, why bother reporting bad news since it just panics everyone and necessitates a bailout that shouldn't have been necessary."
  • smeggysmeg 7mo ago
    Rational market theory is dead. Markets are not rational and do not respond to situations in rational fashions like you suggest. People operate on hype, fear, and insider trading.
    • resters 7mo ago
      I think the law changes the article describes prove your point. Companies would have nothing to gain by this if investors were rational.
• nicofcl 7mo ago
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• westurner 7mo ago
  That's disrespectful to investors. Persons affected by the market deserve quarterly earnings reports; which should be trivial given sufficient accounting systems.
  • westurner 7mo ago
    Less accounting accountability -> Greater liability Other international markets under consideration for investment are expected to retain their sub-annual reporting requirements. Does this policy provide for allowing firms to optionally continue to disclose their financial status to all investors quarterly using the existing guidelines for scheduled disclosure? Firms could instead instruct their CAO Chief Accounting Officer to continue to prepare quarterly reports and work on being able to prepare automated monthly reports. Markets with a no-fee CBDC have the advantage on transactional accountability. If all transactions were in CBDCs, the treasury report for quarterly or monthly statements of accounting accountability would be easy. Investors have for quite awhile operated with legally mandatory quarterly accounting reports and explanations of the nature of the costs and returns. You do the now-annual earnings report webcast Sort of like when you put off working on a paper until the last minute
• bandrami 7mo ago
  Oh things must be about to get bad
• napierzaza 7mo ago
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• philipdavis 7mo ago
  When you wonder how much damage one person can do in 4 years...
  • tso 7mo ago
    "The President in particular is very much a figurehead — he wields no real power whatsoever. He is apparently chosen by the government, but the qualities he is required to display are not those of leadership but those of finely judged outrage. For this reason the President is always a controversial choice, always an infuriating but fascinating character. His job is not to wield power but to draw attention away from it. On those criteria Zaphod Beeblebrox is one of the most successful Presidents the Galaxy has ever had — he has already spent two of his ten presidential years in prison for fraud."
  • kahrl 7mo ago
    It's not one person, it's an entire criminal organization that merged with the GOP. And it is not in the personal best interest of anyone with a modicum of power to do anything about it, so nothing will be done.
• blobbers 7mo ago
  Well, this is going to make insider information a lot more powerful... You've got 364 days in between the truth, and if you think a company is fudging it's numbers you've got to wait another 365 before anything else comes out.
  • niij 7mo ago
    The proposal is to change to bi-annual. Not annual.
    • blobbers 7mo ago
      Okay, I mean /2, but you get what I mean. Personally I think it might be better to be longer term oriented, but audit teams will lose revenue... Or just have a harder time reconciling longer time periods.
• wetpaws 7mo ago
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• sulam 7mo ago
  The fact that this is optional means it will still happen, simply because of the signaling doing it quarterly will provide.
• sambull 7mo ago
  The rug pull on our 401ks has begun
• gethly 7mo ago
  Last year, I heard about this maybe coming, and here it is. On the positive side, it removes a lot of burden from the companies as making those earnings reports 4 times per year is no joke. A lot of effort goes into it. On the other hand, earnings reports are the only times, 4 times per year to be specific, where we can clearly see real numbers and how the company is doing vs what the company is "selling" to the public. So this inherently damages transparency, no doubt about that. Also, rememebr all those insider trades the politicians love to do? Well, now it will be even harder to monitor.
• tormeh 7mo ago
  Isn't the solution to a rare task being painful to make the task frequent? What if we required daily/weekly fiscal reporting? Would that even be feasible? I guess it would force complete automation, which might make it much more difficult to change things and reduce company agility. Would be fun to hear the opinion of someone actually involved with the process.
  • Esophagus4 7mo ago
    Tricky part is it’s not actually a technology problem. Generating the numbers is already automated. It’s “pay [external] auditors and legal to review to make sure all of this won’t get us thrown in jail” If those processes are automated because the law, accounting, and audit professions innovate, then I would suspect you’d
• utopiah 7mo ago
  Finally, free market. /$
• vicchenai 7mo ago
  [dead]
• nodesocket 7mo ago
  There is a great book called “The Number: How the Drive for Quarterly Earnings Corrupted Wall Street and Corporate America” by Alex Berenson. In it he outlines various frauds and market calamities: WorldCom, Enron, 2008. He makes the point that earnings per share often times comes down to cents and a single cent of earnings can make a stock rocket or plummet. Thus there is often complicated and opaque financial gymnastics to adjust EPS to meet expectations. It’s a great read.
• DocTomoe 7mo ago
  The optimist in me wants to believe the lack of a quarterly report requirement will increase decision-making timeframes and will give industry leaders more time to plan long-term. But I also like to believe that Santa is, in fact, real.
• freediddy 7mo ago
  Most countries in the world only report every 6 months.
• yalogin 7mo ago
  Why do we want to make the stock market mimic the crypto market? What need is the 24/7 trading solving? Just for hft companies to make more money? Seems like a genuine reason to diversify to Europe and Asian markets
  • KK7NIL 7mo ago
    > What need is the 24/7 trading solving? There's a reason the Black-Scholes model assumes market prices are continuous. The discontinuity of the market makes hedging options a lot more complex and expensive. 24/7 trading doesn't completely fix that, but it does help.
  • xxpor 7mo ago
    As a practical matter as a "normal person" who just wants to rebalance/do a deposit/withdraw every so often, the market only being open 6:30 AM-1 PM on the west coast is very annoying. 6:30 AM to say 10 PM would solve a lot of those issues though without needing to go 24/7 (unless you work night shift...)
• giantg2 7mo ago
  The article is sparse on details. I think large companies should continue to report quarterly. I think semi-annual reporting for small caps could be a good thing since it would reduce the costs associated with preparing the reports. Some states allow for this type of lower frequency reporting for taxes based on the size of the obligation.
• Havoc 7mo ago
  The chances of this actually changing anything is quite low. All our quarterly reporting is legally locked in. It’s getting done regardless of what the SEC says
• diebeforei485 7mo ago
  I think this is OK. It allows for more long-term planning. 6 months will fly by.
• 6thbit 7mo ago
  So the first earnings report of an IPO wouldn't come until 6 months later? potentially already indexed everywhere?
• 6thbit 7mo ago
  > the rule is expected to make quarterly reporting optional and not eliminate it altogether. Would there be any incentive for companies to still report quarterly? would reporting make them appear more transparent than 6month reporter competitors in their space?
• inemesitaffia 7mo ago
  Who is this supposed to help