We survived another political convention season, my friends. High fives all around.
You may be shocked to hear that there has been plenty of news cycle beyond the U.S. presidential race with Q2 earnings, economic reports (hello July nonfarm payrolls!), and a new all-time high for the S&P500. So much for that old saying about “sell in May.”
As we head into the weekend, here’s a quick round-up of some of the news that caught our attention. Consider it our gift to you to keep you entertained and informed during your evening commute (for my train/subway riders), Friday afternoon wind-down (wine-down?) or over your weekend morning coffee. Cheers.
Companies Routinely Steer Analysts to Deliver Earnings Surprises (Wall Street Journal)
We received a LOT of calls and emails over this article.
Audacia takeaway: Investor Relations is about making sure that there is transparency in company communications with investors and analysts. Ensuring that investors and analysts are well aware of public information is a legitimate and very appropriate activity. Analysts, like all of us, are awash in news and data. Many sell-side analysts cover upwards of 20 companies; buy side analysts may cover hundreds of companies. It is critical that companies ensure that their public messages are heard and comprehended so that they can be fairly valued.
That said, investor relations professionals (IROs) operate within SEC regulations called Regulation Fair Disclosure. There are legal ramifications for those companies who do not operate within those regulations (see: Office Depot). Additionally, investor relations professionals should encourage their employers to have a well-documented quiet period policy and stick to it.
Daily Report: Venture Capital’s Endangered Middle Class (New York Times)
Two weeks ago, we highlighted Entrepreneur.com’s report that venture capital placements are up 20.5% over Q1’16. This week, we are looking at venture capital fundraising. Per the New York Times, “In the first half of the year…just five venture firms raised $7.4 billion, or about one-third of the $22.9 billion raised over all by V.C.s.”
What could this mean? Well, it could mean that with a significant concentration of funds in a few firms we could see more concentrated placements, potentially leaving mid-sized funds and companies at a disadvantage.
Audacia Takeaway: Lots of game left to play here but it’s worth keeping an eye on… and it may open a unique business opportunity for those willing to step into the void.
Regulators Ask Big Banks to Give More Details About Trading Activity (Wall Street Journal)
In this era of high-frequency trading and dark pools, it is interesting to see that the SEC may request that big banks report trading revenue by product line (e.g., bonds, stocks, commodities, etc.). Today, trading revenues are reported en masse with little transparency into what might be driving a bank’s trading results.
Audacia Takeaway: This could be an interesting turn of events for investors by shedding light not just on what is trading but how it trades.