| BUSINESSWEEK ONLINE : MAY 24, 1999 ISSUE | ||||||||
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| COVER STORY
Commentary: Analyst Calls: Let Investors Listen One of the beauties of the Internet is that it gives ordinary investors access to secrets once known only to the pros. One by one, barriers that kept the public on the outside looking in are falling. The next to go should be the clubby world of analyst conference calls. These private phone chats between company bigwigs and analysts and portfolio managers usually come after an earnings release and aren't supposed to disclose additional information that would be material to investors. But the Securities & Exchange Commission has noted that stock prices sometimes move during and shortly after the calls, raising concerns that companies are releasing material information to a favored group. For about a year, the SEC has been speaking out against selective disclosure. Technology allowing easy and inexpensive real-time audio broadcasts over the Net could--and should--bring an end to the exclusionary nature of most of these conferences (table). Already, tech companies such as Microsoft, Intel, and Sun Microsystems are letting investors click into their calls. Yahoo! had 6,600 people attend its first-quarter earnings call on Apr. 7. As more homes get high-speed Net access, Webcasts will become more popular and useful, incorporating slide presentations and video. In December, NASDAQ launched a pilot program with broadcast.com to prod its largest 100 companies to Webcast their conference calls. ''I couldn't think of a better way to cure selective disclosure,'' says SEC Commissioner Laura Unger. For investors, Webcasts are a real step forward. From hearing live presentations, investors can form judgments about management's savvy. Subtleties such as an exec's tone can signal conviction or caution regarding growth prospects. Calls can also provide a fascinating glimpse into a company's inner workings. More companies should jump at this chance. Online conferences are good not only for investors but for companies themselves. Some execs say these conferences can help form stronger bonds with shareholders and build long-term support. Yet while about 80% of public companies host analyst conference calls, so far few are taking them online, says the National Investor Relations Institute. Broadcast.com says only 11 of the NASDAQ 100 companies have thus far participated in the pilot. Brian Connell, CEO of StreetFusion (formerly c-call.com) says his two-year-old company Webcasts earnings calls to analysts for 625 companies--but only 10% to 20% are open to the public. UNDER SIEGE. Companies cite many reasons for not opening their mikes to the public--all of them flimsy. They say average investors won't understand the information. But investors can misinterpret a press release, too. Companies fear that competition or the media may listen in. But they should assume media and rivals may gain access to private calls as well. They cite potential legal problems, but Unger doesn't see impediments if SEC guidelines are followed involving predictions of sales and earnings. Mark Coker, who founded BestCalls.com in late March to provide a guide for online earnings conferences, says some companies feel ''under siege'' from online investors. The rampant misinformation in chat rooms and bulletin boards makes execs wary of anything that smells of cyberspace. Instead, he says, ''they should see it as a tremendous opportunity to attract and maintain long-term investors.'' It's time for all public companies to spill the beans in cyberspace. Internet calls won't end private conversations between Wall Street and public companies. But they'll sure improve the information shareholders need. BY AMEY STONE _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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 Your Guide to Online Investing COVER IMAGE: Our Guide to Online Investing CHART: The Biggest Online Brokers TABLE: Broker Scoreboards TABLE: Online Brokers That Meet Your Needs Gotta Do the Legwork ``A Diversity of Thought'' Testing the Waters Commentary: Why Old-Line Firms Need New Online Tricks TABLE: Full-Service Dream The Right Tools for the Right Trades Street.Cop TABLE: Smart Investing on the Web TABLE: Web Resources for Online Investors Rocket Science Made Simple TABLE: Quant for a Day How to Seal a Great Bond Deal TABLE: Where to Buy...And Get Info What to Read: The Good, the Bad, and the Terrible TABLE: Wired-Up Investing Books Investor Beware of Web Talk TABLE: Separating Fact from Fiction TABLE: Cross Checkers Smells Fishy? Tell the SEC This EDGAR Is a Real Know-It-All TABLE: Searching the SEC Commentary: Analyst Calls: Let Investors Listen TABLE: Calling All Netizens The Barker Portfolio: A Battle Plan for Accidental Investors Inside Wall Street: Wells Fargo Online CHART: The Rise Trails Other Banks Inside Wall Street: Bidding for 3COM? CHART: Prior Takeovers Fizzled Out Inside Wall Street: A TV-To-Net Linkup CHART: ACTV's Rise Is Due to E-Commerce INTERACT E-Mail to Business Week Online | |||
