May 5, 2015
Thanks to the Securities and Exchange Commission (SEC) and stock exchange requirements, investor relations officers are acutely aware of the need to issue material news, such as earnings, in a manner that all recipients receive simultaneously. Prior to the SEC’s Regulation Fair Disclosure and before technology advancements, that used to be a lot easier given that newswire services were the main and reliable vehicle for distributing material news.
Today, however, as Twitter recently learned when its first-quarter earnings announcement was released prematurely, even the briefest mishap can set off an unfortunate chain of unintended consequences in just a few seconds.
What can we learn from this? For one thing, technology has become so sophisticated that once anything is posted, no matter how briefly or inconspicuously, we must assume that it simultaneously becomes public knowledge, and the consequences will be immediate. That means the following guidelines are more important than ever:
1. Rely on an established newswire service for the dissemination of material information.
Wire services such as BusinessWire continue to strongly advocate for the simple, streamlined and secure process they have always used for the issuance of company news. And while some companies may seek to save money and streamline operations by establishing their own website as the main channel of distribution, there clearly are risks in doing so.
2. Switch up or protect your URLs.
The latest technology has enabled some investors, analysts and journalists to find postings prematurely by sending out “crawlers” waiting to pounce on the information and broadcast it out to the world the moment they find it. They can easily do this by automatically searching known web addresses and adjusting the URL to the current quarter. This would suggest that URLs need to be randomized or password-protected until ready to go live.
3. Learn from others’ mistakes.
In a recent article in PR Week, I shared the idea that Nasdaq ought to partner with Selerity to determine what happened. Christina Warren of Mashable did just that – she reached out to Selerity to determine how they found the information prior to Twitter’s scheduled earnings announcement. What Selerity’s CTO Andrew Brook told Mashable suggests that the current process used by Nasdaq and Twitter needs some adjustment. And that goes for all companies that follow the same routine of loading their releases onto their own or third-party sites prior to the time of issuance.
In the end, managing the flow of information is the company’s responsibility, although a company’s technology partners certainly play a critical role. Although unfortunate for Twitter, we hope this latest example of the mind-blowing capabilities of technology will result in safer processes and truly simultaneous information for all.
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