CONFERENCE CALLS
None
FOOL PLATE SPECIAL
Privilege & Secrecy?
"202.05 Timely Disclosure of Material News Developments. A listed company is expected to release quickly to the public any news or information which might reasonably be expected to materially affect the market for its securities. This is one of the most important and fundamental purposes of the listing agreement which the company enters into with the Exchange." (emphasis added)
-- New York Stock Exchange Listed Company Manual
Whenever a company is listed on the New York Stock Exchange, it agrees to abide by the rules and regulations of the listing agency, including the above requirement lifted directly from the manual. Unfortunately, a perverse system of privilege and secrecy operating on the edge of credibility and designed to prop up the interests of sell-side brokerage analysts has put many leading companies in violation of this rule over the past few years, including, as of yesterday HEWLETT-PACKARD <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HWP)") else Response.Write("(NYSE: HWP)") end if %>.
When contacted last week for its replay number, Hewlett Packard Investor Relations representative Patricia Chapman refused, despite the fact that she has granted the Fool access to the *replay* of the conference call previously (See 5/16/96: Hewlett Packard 2Q for details). Instead, she referred the Fool to Steve Beitler, who denied the Fool access on the grounds that the call was strictly for financial analysts.
The conversation basically went like this: Was Beitler, if he was aware of the New York Stock Exchange's affirmative obligation, to disclose all material facts to investors in a timely way? Yes, he was, and Hewlett-Packard's call discussed the same material facts that the accompanying press release covered. Is the call then just a reading of the press release? Of course it isn't. Does the call disclose any material facts that were not revealed in the press release? No. If someone took a survey of the analysts on the call and asked them what was covered, would there be any information that was not in the press release? Yes, there would be. Could any of these be considered material facts? Yes, they could. At that point, Beitler begged off because of pre-earnings release duties and asked to call back some other time to continue the conversation.
Frankly, this turn of events with a quality company like Hewlett-Packard is quite disheartening. Universally renowned for forward-looking human resources policies and on the forefront of corporate citizenship, it is kind of sad that its Investor Relations department would sacrifice shareholder interests in order to assure that only sell-side analysts get to report on the intimate details of the conference call. The conference call is one of the few privileges the sell-sider has left. Companies give them all sorts of goodies that they feed out to their paid client base, controlling the message by bribing the messengers.
Frankly, we don't want to be in on the live call... we just want access to the recording to summarize the material facts that will be discussed that won't be in the press release. Although companies that do this insist there is no material information released in conference calls, it remains our stance that any time an issue is further clarified in a call, whether revenue breakdown, growth rates of geographical regions or details of a forward-looking statement, it is a material fact and the company stands in violation of its affirmative obligations under its listing agreement if it does not do everything possible to release it to the public -- including, but not limited to, granting access to the recording of the conference call to any credible and interested party.
Anyone who wants to contact Hewlett-Packard and ask about this benighted decision, feel free to call Patricia Chapman at (415) 857-2644 or Steve Beitler at (415) 857-2387. Anyone who believes that Hewlett-Packard is violating its listing requirements can contact Lorraine Ingrilli of the NYSE Office of Investor Complaints and Inquiries at (212) 656-3000. Simply say that you believe Hewlett-Packard is violating its affirmative obligation under rule 202.05 by giving out material facts in a conference call to financial analysts that do not appear in the press release and ask them to look into this matter. Anyone out there in Lunchtime News Land who has the replay number and access code for the Hewlett-Packard conference call should please send that puppy over to [email protected].
FUSION SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: FUSN)") else Response.Write("(NASDAQ: FUSN)") end if %> jumped $1 7/32 to $20 15/32 this morning after the company announced it was selling its ultraviolet curing unit for $121 million, a full three-quarters of the company's market capitalization at market close yesterday. The company will book a $6.60 EPS one-time gain from the asset sale.
ORCHARD SUPPLY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ORH)") else Response.Write("(NYSE: ORH)") end if %> popped up $4 7/8 to $34 5/8 after SEARS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: S)") else Response.Write("(NYSE: S)") end if %> announced it was taking out the home supply chain for $35 per share, a deal worth somewhere in the neighborhood of $415 million.
Takeover speculation in the reinsurance industry has caused Bear Stearns to move NAC RE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NRC)") else Response.Write("(NYSE: NRC)") end if %> from "neutral" to "buy" purely because it might make an attractive buy-out candidate, boosting shares $1 1/2 to $37 1/2. CHARTWELL RE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CWLR)") else Response.Write("(NASDAQ: CWLR)") end if %> rose $2 1/4 to $24 1/4 as well.
THE SPORTS AUTHORITY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TSA)") else Response.Write("(NYSE: TSA)") end if %> continued to rise this morning after yesterday's upgrade to "strong buy" by Alex. Brown & Sons and to "buy" from Lazard Freres. Shares of the specialty sports retailer were up $1 to $22 7/8 this morning.
A change in its promotional practices to resolve complaints made by the Food & Drug Administration (FDA) is what is behind the $1 9/16 to $9 1/8 rebound in shares of ORTHOLOGIC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: OLGC)") else Response.Write("(NASDAQ: OLGC)") end if %> this morning.
LEASING SOLUTIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LSSI)") else Response.Write("(NYSE: LSSI)") end if %> leapt $3 1/8 to $19 1/8 after reporting that it had reached an agreement to provide lease financing for networking equipment sold by CISCO SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CSCO)") else Response.Write("(NASDAQ: CSCO)") end if %>, a major plus for the leasing concern.
TELE-COMMUNICATIONS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: TCOMA)") else Response.Write("(NASDAQ: TCOMA)") end if %> will spin off 37 million series A and B shares of LIBERTY MEDIA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: LBTYA)") else Response.Write("(NASDAQ: LBTYA)") end if %>, which rose $1 5/16 to $26, in order to sell its stake in TURNER BROADCASTING <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: TBS)") else Response.Write("(AMEX: TBS)") end if %> to TIME-WARNER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TWI)") else Response.Write("(NYSE: TWI)") end if %>.
MEDAPHIS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: MEDA)") else Response.Write("(NASDAQ: MEDA)") end if %> was dunked for $22 1/8 to $13 1/2 (yes, 62%) after the medical receivables management firm forecast a third quarter loss of $0.28 EPS to $0.33 EPS, forecasting fiscal 1997 net earnings in the range of $0.75 EPS to $0.90 EPS. The company was expected to earn $0.27.
Halting one of its three Protovir trials due to "lack of efficiency evidence," PROTEIN DESIGN LABS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: PDLI)") else Response.Write("(NASDAQ: PDLI)") end if %> tumbled $8 7/8 to $14 1/4 this morning in heavy trading. The halted trial was for CMV retinitis therapy.
A move to "hold" by Montgomery Securities was all that was required to topple shares of PMT SERVICES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: PMTS)") else Response.Write("(NASDAQ: PMTS)") end if %>, causing the credit card transaction processor to drop another $1 5/8 to $18 1/4 today after a sizable drop yesterday.
CANNONDALE CORP.'S <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: BIKE)") else Response.Write("(NASDAQ: BIKE)") end if %> results looked okay as the firm reported $0.39 EPS versus estimates of $0.32 EPS on higher gross margins. However, fully-taxed, the results were more like $0.33 EPS, not quite the blow-out it first appeared, and shares dropped $2 3/8 to $18 1/8.
None
Randy Befumo (MF Templar), a Fool
Selena Maranjian (MF Selena) another Fool
Prem Kumar (MF Prem) another
Fool