Counterparties: Earnings #fail
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The routine is simple: four times a year, public US companies release their results (54 companies reported today alone). Traders react, analysts weigh in, the media explains and we all move along, ready to repeat the whole thing in three months. How hard can it be? Plenty hard, it turns out.
First out of the blocks this week was Google. Or, rather, RR Donnelley, the financial printer that accidently filed Google’s earnings release early, incomplete and without authorization; the shares had to be suspended for most of the afternoon.
Then it was Dow’s turn. As Michelle Leder writes, someone at the chemical giant inadvertently e-mailed Bloomberg News a layoff announcement. Daimler committed a similar, albeit lesser, mistake, when a communications staffer emailed a draft earnings release to reporters: “It was just a mistake. I realized it instantaneously…instead of saving as a draft, I pushed the send button”.
And yesterday, Factset Research garbled the facts in IAC’s results. IAC said it expected to report a loss in its “media and other” division in 2013 — but as if out of a bad game of telephone, Factset, which offers company analysis and data to investors, somehow heard that the entire company expected to report an overall loss in 2013 and relayed that negative news to clients. Once again, the shares had to be halted.
In a world of algo-driven high-frequency trading, these quaint screw ups are weirdly comforting. They don’t have much long-term effect on stock prices, but they are a reminder that a large part of the market is still subject to very human errors. — Ben Walsh
On to today’s links:
The myth that consumption inequality is a myth – Mark Thoma
The nature of UK austerity – Tyler Cowen
Why technology won’t kill jobs – Ken Rogoff
Debt-based systems are inherently inflexible and lead to crises” – Aleph Blog