Who needs press releases anyway?

February 11, 2009

BGC Partners apparently does not. The self-described global full-service inter-dealer broker of financial instruments issued this announcement on Tuesday (via press release on the PRNewswire press release service, of course):

In compliance with the U.S. Securities and Exchange Commission’s recent guidance regarding “notice-and-access” news releases, the company plans to discontinue issuance of full-text financial news releases via a wire service and will issue only advisory press releases notifying investors when new and material information is available on its websites.

This came out a few hours after General Motors used its website to disclose news that some people might think material: It is cutting 10,000 jobs. There was no press release issued through the normal distribution services.

And then Molson Coors stucksome of its results tables on its website rather than in its press release.

Do three opaque acts in 24 hours equal one clear trend? We fear as much.

We’re not saying reporters should be so lazy as to expect everything to show up on the press release wires. But PRNewswire and BusinessWire do exist for the disclosure of important information that is supposed to reach recipients simultaneously. That way, everyone gets to make their bets and win and lose money with equal abandon.

There may be some arguments for a company to scale back on wide distribution of press releases. After all, PRN and BW charge for issuing them, and every penny counts in Corporate America in these hard times. The Web also is a good place to make information perpetually available.

BUT…. at a time when the economic crisis makes clear delivery of information more important than ever, and money scandals and mismanagement are tearing up the old order of the financial world, is it really the best time to tell people that information they used to be able to get at once on an electronic document will now be buried somewhere in a labyrinthine website? After all, who said that a company had to prominently display information on its homepage? Why not put it somewhere on the website that is three or four clicks deep? Isn’t disclosure normally considered a laudable goal?

We’re curious to hear from readers. Who is moving their information out of the spotlight while keeping it in plain sight?

(Photo: Reuters)

5 comments

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One look at the Rate Cards for PRN gives pause to any marketing department looking to reign in their costs.

Posted by John K | Report as abusive

[...] Comment on the Value of the Newswires In a blog post called “Who needs press releases, anyway?”, Robert MacMillan at Reuters has taken notice of companies who aren’t including their full [...]

“Do three opaque acts in 24 hours equal one clear trend? We fear as much.”How can you call BGC Partners’ notice-and-access release approach when they haven’t even done it yet? Reserve your judgment until it actually happens.Other companies have already used this approach and the media and investors have no complaints.This is the second article by you on this topic that is not well informed.

“After all, who said that a company had to prominently display information on its homepage? Why not put it somewhere on the website that is three or four clicks deep?”The SEC says so. You can’t bury the information. It’s important to read the SEC’s interpretive guidance. It’s available on the SEC’s website here:http://www.sec.gov/rules/interp/200 8/34-58288.pdf

Here is an excerpt of what Thomson Reuters, the employer of this blogger, emailed to all of its IR clients (the third paragraph is interesting):”…Given the volume of questions we have received about the SEC website disclosure guidance issued on August 1st, 2008, I wanted to highlight the factors you should consider as you evaluate options presented by this interpretative release. Below please find a summary of recommendations concerning your IR website….We are encouraged that the SEC has recognized the Internet as a fast, cost effective and efficient medium to achieve disclosure of corporate information to a broad range of corporate constituents. Our experience has been that the use of the Internet to distribute SEC filings and other corporate information is both beneficial to investors and inexpensive for issuers…Save money by re-considering the traditional earnings press release. Consider using a wire service provider to issue an advisory release that provides notice that new material information has been posted to your site with a link directly to this information. This ensures investor attention but may significantly lower costs…”

Posted by jason mcgruder | Report as abusive

Keep in mind there is also Marketwire who is roughly 25-35% more cost effective than both PRN and BW, while still distributing your news to the AP, LN, Reuters, Bloomberg, Dow Jones, Online, Trade Pubs, etc.. If you are looking to reduce cost and have the same effectiveness there is a 3rd option, Marketwire.

[...] I predicted this would happen in the post I wrote immediately after Google made the announcement April 15. I made that prediction based on past experience with Reuters’ coverage of other companies that have made similar moves before Google, such as here and here. [...]