Business Wire Comments on Wall Street Journal story on Speed Traders

February 11, 2014

by Tom Becktold, Senior Vice President, Marketing

In case you missed Friday’s (February 7, 2014) Wall Street Journal story, Speed Traders Get an Edge, Scott Patterson reported about a high-frequency trader that licenses Business Wire content. In the piece, the reporter details how, with equal access to our file as news organizations, the firm was able to execute trades very quickly. Not exactly ground-breaking reporting, but in the Nanex research cited, you do see how rapidly events unfold once we issue news.

To answer the question, Business Wire provides one feed of news, so all subscribers – news media, consumer-facing sites, researchers, investment firms – have equal, simultaneous access to our file. There are no tiers of access (paid or unpaid) and no one gets a jump from us. The fact is that Business Wire, via its NX delivery technology, delivers its news feed to every recipient, at the same time.

This WSJ article is about how high speed traders might be ‘gaming the system'; that is, using technology to create a millisecond advantage on accessing news. And, that millisecond, which is one thousandth of a second , is apparently all it takes to make this a story.

Bloomberg’s Matt Levine provided excellent perspective on Friday with his story High Speed Traders Trade Faster Than Low Speed Traders.

Drawing upon the Journal article and the Nanex research, here’s a timeline that provides insight into how efficient our patented NX platform is – what you see is the trading firm, Bloomberg and Dow Jones acting on the Business Wire story within 300 milliseconds – a measurement that most of us, as humans, might have a hard time wrapping our head around:

  • · 16:00:00.000 – Market scheduled to close
  • · 16:00:00.175 – Business Wire issues Ulta press release
  • · 16:00:00.225 – Stock trades within 50 milliseconds of release
  • · 16:00:00.242 – Bloomberg News runs Ulta story
  • · 16:00:00.464 – Dow Jones runs Ulta story
  • · 16:00:00.688 – Nasdaq closing price set

As you can see, the release goes out, then recipients act on it; there is no jump in the delivery, only in how it is utilized.

A curious item from the Journal story also caught our attention: “Business Wire’s competitor, PR Newswire, says it doesn’t provide trading firms access to its “Disclosure Feed” despite frequent requests. The company says it provides the news feed to clients with the understanding that information provided won’t be used for trading purposes.”

As we noted, Business Wire does not have a separate “Disclosure Feed” precisely because markets move so fast. And, the last time we checked, PRN had a healthy licensing and reseller business that serves the investment community. As many investment firms now have high-speed trading desks, the statement appears disingenuous at best.

So, what does this all mean to our clients and network recipients? Business Wire remains committed to full, fair and broad-based disclosure, providing equal access to all market participants. With news organizations and investment firms increasingly relying on algorithms to trigger rapid coverage and trades, Business Wire ensures a simultaneous, level playing field to our content.

Business Wire was the first newswire to eliminate the 15 minute delay to the investment community back in 2000, in lock step with the letter and intent of Reg FD.

We have built our business around full and fair disclosure for all market participants. By doing so, we have earned the trust of our corporate clients each and every day for more than 52 years. We stand by our patented technology, our gold standard business model, and our commitment to the highest standards of security, performance and reliability.


Investor Communications vs. Social Disclosure on Social Media

October 22, 2013
Image
By Thomas Becktold, Senior Vice President, Marketing
The Wall Street Journal’s Ben DiPietro (@BenDiPietro1) recently filed a story, “The Dos and Don’ts of Social Media Disclosure.” Not surprisingly, we have something to add.
Ben interviewed E. Terrell Gilbert Jr., an attorney at Arnall Golden Gregory LLP, who provides some solid advice to IROs, like this, “Where I think companies are prone to slip up is if focus solely on the new ways to communicate with investors but forget the basics of disclosure.”
Where the article falls short is that it doesn’t distinguish between investor communications and disclosure on social media. It doesn’t address ownership issues of executives’ personal social media accounts that are used for investor communications. It also lumps investors into a single homogenous group, where IROs know that buy-side and sell-side investors have significant differences in their preferred communications platforms and content.
While Gilbert rightly suggests that a CEO should send out a tweet that includes a link to a press release to provide more detail about the company, he mixes up disclosure and investor communications.Here’s why: the press release is the disclosure, not the CEO’s tweet.
The press release would be filed as an 8-K, issued on the wire and posted to the company’s website to ensure full and simultaneous distribution and access to all market participants. The CEO tweet is an additive part of investor communications, providing an opportunity for the CEO to more directly engage audiences, not unlike an open earnings conference call.
Gilbert notes that if companies want social media to be the first place they make market-moving information public, they should “take the right steps to let investors know the CEO’s Twitter account or Facebook page is the recognized channel of distribution…” I’m not a lawyer, so I don’t dispute the accuracy of what he says, but from a communications perspective, there are a lot of problems here.
First, if you’re going to establish an executive’s personal social media account as a disclosure channel, you better lock down some written ground rules to protect the company. If the executive leaves, does he take his channel and the followers with him? Is it ok for the executive to mix in personal posts (“look at my kid’s new puppy!”), photos and comments that may be of no interest to investors?
The National Investor Relations Institute’s Southern California chapters recently had a panel discussion on “The Future of Investor Communications.” I was fortunate enough to be on that panel with Ben Claremon, a research analyst at Cove Street Capital. That discussion provided a microcosm of the varying needs of investor constituents. Claremon was clear that he did not want companies using Twitter, Facebook or other social channels to disseminate material news. As he put it, investing and investor communications is serious business, and using the latest social channel “trivializes what we are doing.” He wants relevant information via trusted channels in a timely manner.
As we’ve discussed before, social media was not designed for disclosure, does not provide simultaneous delivery to all market participants and is often loaded with non-relevant content. Your followers or readers don’t see every post from their followers.
Facebook uses hundreds of factors to determine which posts a user would be most interested in seeing, all beyond the control of the disclosing company. Twitter offers promoted tweets, allowing an advertiser to jump ahead of organic tweets. In all social media platforms, the likelihood that your users actually see the content you share is a function of how frequently they visit their channel, how many people they follow, how much those folks post and the type of content they engage with, among other factors.
Gilbert points out that “the FD in regulation FD stands for fair disclosure” and we most certainly agree. Social media should be used as an additive to investor communications, but in no way does it provide a level playing field for all market participants.

Common Sense vs. Nonsense: What Thomas Paine Can Teach Us About Disclosure

April 22, 2013
by Cathy Baron Tamraz, Chairman & Chief Executive Officer, Business Wire
Cathy Baron Tamraz

Cathy Baron Tamraz, Chairman & CEO, Business Wire

Herb Greenberg, the respected CNBC market commentator who first asked whether Netflix violated Reg FD with its use of social media, subsequently put the issue into its proper perspective: It’s all about “common sense.”

Unfortunately, common sense seems to be in short supply these days, as attempts to redefine “full and fair disclosure” depreciate its value to market participants.

In a prescient post in July 2012 (http://www.cnbc.com/id/48086440), Greenberg asked whether Netflix CEO Reed Hastings side-stepped Reg FD by touting on his Facebook page that Netflix had set a new milestone in monthly viewing.

The provocative post apparently caught the eye of SEC officials; the agency filed a Wells Notice against Hastings and Netflix, indicating an inquiry into whether there was a basis to pursue the allegations.

Common-Sense-DisclosureGreenberg, in a December 2012 post, reflected on the surprising reaction of some folks to the SEC’s action. As far as Greenberg was concerned, the issue was simple.

“Bottom line: I’m all in favor of social media as a point of dissemination,” Greenberg wrote.” “They aren’t going away. But public companies and executives want to use them, and they have to play by the rules. That means, simply, issue a press release at the same time. Simple common sense, don’t you think?”

The SEC tweaked the rules recently by issuing a report on the possible use of social media tools for compliance purposes. Unfortunately, the agency’s report generated a lot of heat, but little illumination.

Thomas Paine, in talking about government and society, wrote his passionate pamphlet called “Common Sense” in 1776. Written more than 200 years ago, his words are timeless:

“There is something exceedingly ridiculous in the composition of the monarchy. It first excludes a man from the means of information, yet empowers him to act in cases where the highest judgement is required.”

Common sense dictates that full and fair disclosure means that all market participants have simultaneous, real-time access to market-moving information. Business Wire has a patented news delivery platform — “NX” — that ensures network recipients worldwide have equal, unrestricted and simultaneous access.

Common sense dictates the overriding importance of network security, and the vetting of corporate announcements to validate their source. Business Wire’s network systems are audited annually by independent management consultants, ensuring compliance with the rigorous standards of securities regulators in multiple international jurisdictions. Additionally, Business Wire has close to 200 editors — and authentication procedures — to provide credible, vetted information to the capital markets.

Common sense dictates that an audit trail exists to protect issuers in the event of a regulatory investigation. As a point of fact, the SEC itself utilizes Business Wire’s audit trail when investigating companies that have caught their attention.

Common sense dictates that the recommendations of prominent professional organizations such as The National Investor Relations Institute be factored into policy decisions. Specifically, NIRI’s “Best Practices” call for a combination of Reg-FD compliant platforms to ensure the broadest possible investor outreach.

Common sense dictates that service providers adapt the latest technologies. Business Wire’s multi-channel platform has long embraced social media (it has 61 industry Twitter feeds). In fact, Business Wire is the industry technology leader with five patents, including two for social media innovations.

Common sense tells us that information should be simultaneous and ubiquitous. Excluding anyone from access to material information is the road to chaos, leading to a possible return to the “Whisper on Wall Street.” Ironically, this is the very thing that Regulation Fair Disclosure sought to eliminate in 2000.

Clearly, there is no substitute for common sense. While it is apparently lacking in some circles, the encouraging news is that the investor relations industry has a proud history of taking a pragmatic and thoughtful approach in meeting its professional obligations, as confirmed by this recent NIRI survey.

The silver lining, as Thomas Paine and Herb Greenberg have taught us, is that common sense never goes out of style.


Social Media in the Spotlight: Business Wire CEO Cathy Baron Tamraz Talks About the SEC’S Guidance on CNBC

April 11, 2013
by Neil Hershberg, Senior Vice President, Global Media/Business Wire

Business Wire CEO Cathy Baron Tamraz is rapidly becoming the public face of full and fair disclosure.Tamraz appeared on CNBC’s “Closing Bell” Tuesday, where co-anchors Maria Bartiromo and Bill Griffeth interviewed her on the potential market implications of the SEC’s recent guidance on the use of social media for Reg FD compliance.

Video Clip:

Tamraz quickly distilled the key issues of the disclosure debate, explaining that popular social media platforms such as Twitter and Facebook — while effective in extending investor outreach — are only one component of full and fair disclosure. She added that social media complements other Reg FD-compliant channels, including a broadly disseminated news release via a legitimate wire service, posting on an IR web site, webcasts, and regulatory filings. All these elements contribute to a “Best Practices” disclosure program that equitably and inclusively serves the needs of all market participants.

She emphasized that Business Wire makes extensive use of social media tools as part of its multi-channel distribution platform, and that the company holds five technology patents, including two in social media. One patent — its “NX” news delivery platform — is key to the disclosure discussion because it ensures simultaneous, real-time access to market-moving information by all network recipients worldwide. Simultaneity and market fairness is what Reg FD is all about; Business Wire’s unique ability to meet this stringent requirement has been independently validated by patent authorities in multiple jurisdictions.

Additionally, Business Wire provides an audit trail for every release, which is a critical benefit in the event of a regulatory investigation. There also are multiple archives, including such popular databases as Factiva and Lexis/Nexis, that provide an easily accessible and reliable record of all corporate announcements.Tamraz has emerged in recent years as an outspoken advocate of Reg FD’s guiding principles: full and fair disclosure and a “level playing field.”  She has written extensively on the topic, appeared before regulatory agencies and advisory councils focusing on corporate governance issues, and is the industry’s most vocal proponent of providing all investors — institutional and individual alike — with equal and unrestricted access to price-sensitive information.

Press Release:
Business Wire Says Social Media Platforms Are Only One Component of Full and Fair Disclosure and Offers Issuers a Guide on How to Effectively Use Social Media Tools http://www.businesswire.com/news/home/20130404006180/en/Business-Wire-Social-Media-Platforms-Component-of%C2%A0Full

Blog Post:
What Can Louisville’s Kevin Ware Teach the SEC and Public Companies About Social Media?
http://blog.businesswire.com/2013/04/04/what-can-louisvilles-kevin-ware-teach-the-sec-and-public-companies-about-social-media/


What Can Louisville’s Kevin Ware Teach the SEC and Public Companies About Social Media?

April 4, 2013
by Thomas Becktold, Senior Vice President, Global Marketing

Turns out, quite a bit.  You see, within hours of his terrible injury on the basketball court, fans were flocking to Twitter to offer their support.  Unfortunately, most were initially going to a fake Twitter account and weren’t engaging with Kevin Ware at all.

Following the April 2, 2013 SEC Report of Investigation that says social media accounts fall under the guidelines of their 2008 Interpretive Guidance Report on IR sites, we have put together some tips to help public companies in their IR social media efforts.

Social media engagement should be a part of the communications mosaic, but it is not a replacement for full, fair and simultaneous distribution of news achieved through Business Wire.  Investor relations professionals appreciate that their audiences are diverse and dispersed and use a wide range of platforms and content sources to access material information.

SEC_Blog_Post_Graphic

Social Media Opportunities for Public Companies

  • Social media channels offer the ability to gather intelligence and engage in two-way conversations, and as part of a comprehensive communications mix, are quite valuable.
  • Companies should establish official IR-specific social media channels on key platforms, even if they are not ready to use them.  If the channels are not active, put a disclaimer or keep them dark.
  • For those with a solid understanding of social media and their investor audiences, regular, consistent use of the channels for both good news and bad news is key.  Just like any other disclosure platform, don’t tweet or post only the good results and skip the bad ones.  Once you commit to adding a social media channel to your communications mix, stick to it.  If you discontinue use of a channel, communicate that as well.
  • Establish and publish a clear policy on your company’s use of social media as a supplemental channel to alert investors of disclosure press releases and filings.  Cross-reference those channels on your IR site, press releases and filings.
  • Listen to conversations and track sentiment and influencers, including your company’s Twitter “Cash Tag” – tweets tagged with your ticker symbol preceded by a $.  Business Wire now offers social media sentiment analysis reports for press releases via our partnership with NUVI.  For real-time monitoring and engagement, the NUVI platform provides an easy visual representation of influencers and sentiment based on the terms you choose.

Social Media Cautions for Public Companies

  • Full and Fair Access:  According to Pew Research as reported by TechCrunch, only 16% of adult US Internet users are on Twitter.
  • Privacy: Social media channels have barriers to entry and require the user to set up accounts and agree to the terms and conditions of each channel.  Your company does not control those terms and they may be objectionable to those interested in your news.  Chances are, your own IR site, as a best-practice, does not require visitors to agree to terms and conditions to access material news.
  • Fragmentation: Where’s Waldo meets disclosure.  As an IRO, do you opt for a wide, instantaneous Business Wire distribution or solely post to Twitter or Facebook and hope people find your material information?  Ask yourself, how do your investors, potential investors and media currently access your news?  Chances are, it’s through a widely divergent set of sources.
  • Simultaneity: The fact that users must click on a link to read a full-text announcement (that will reside elsewhere) adds latency and unfairness to the disclosure process.
  • Usability: Is social media going to meet the needs of your audiences?  Is it realistic to ask your institutional investors to hit “Like” on Facebook to get the latest earnings release alongside their elementary school friend’s picture of their latest cake or new puppy?  Should you expect your retail investor to stop relying on their brokerage account to access your news because it’s no longer there and instead subscribe to your Twitter feed?
  • Security: Don’t use social media as your sole means for disclosure: Look at Kevin Ware, the Louisville basketball player and what happened on Twitter just after his recent on-court accident.  Someone set up a fake account because, yes, we know it’s that easy to do.  And, that fake account had more followers than his real account.  Imagine potential investors searching in vain for the “real Twitter account” for your company when breaking news happens?  (Or finding that the official account has been hacked, as recently happened to both Burger King and Jeep.) Want to get a “verified” account?  Good luck —  and it might not make a difference anyway, according to this recent Mashable article. The Business Wire slug ensures a seamless, secure, audited experience.
  • Reliability: Twitter has been riddled with outages as it grows – think how many times you’ve seen the Fail Whale. Business Wire operates at 99%+ uptime.   With your news widely distributed, if one site or system goes down, investors have many others to turn to.
  • Liability: Leveraging a Business Wire distribution ensures full and fair distribution.  Tweeting a release today is akin to walking across a frozen lake in late March.  Your odds of making it across are good, not great.

Want to read what journalists and others are saying about the SEC ruling?  Here are a few links – the comments sections often provide greater insight for you to consider as a communications professional:


Web-Only Disclosure: Less Continues to be Not More

June 21, 2012
by Michael Becker, Senior Vice President, Financial Product Strategy

Michael Becker, SVP Financial Product Strategy

At the recent NIRI National event in Seattle, I attended the recurring panel on web disclosure.  In 2010 I authored a post-NIRI blog about a similar Web disclosure panel and I wanted to take a few moments to tell you what has changed (or not) over the past 24 months.

So what has changed since NIRI’s first foray into discussing web disclosure?  Largely nothing.  Microsoft, the panel’s moderator, web discloses earnings-only and continues to utilize a commercial newswire for IR and PR purposes (119 times YTD), Thomson still preaches about the benefits of web disclosure in order to promote its half-baked newswire, former SEC attorneys tell us that an 8-K is disclosure and the NIRI community is yet again rendered unable to answer the key question: As communicators, is communicating less fully and less fairly okay?

The reality is that web-only disclosure cannot stand-up to what commercial newswire services like Business Wire provide quarter-after-quarter without fail:

  • Editorial Efficiency: I teach at a local business school and tell my students (repeatedly): put down your project for an hour or two and when you come back, the errors will stand out.  As professional communicators, we do not always have the option to “walk away” from our work for a few hours.  That is precisely why a newswire editor is so imperative to your news release process.  Business Wire editors work 24/7/365 for you, professionally formatting your copy while catching thousands of errors each year.  Publish press releases directly to the web and you are essentially a “Wallenda” without a net.
  • Audit Trail Assurance: From start to finish, the Business Wire process is fully audited.  We know who submitted what and when, and which editor worked on your project every step of the way.  When the SEC comes calling, and they do regularly, it is the Business Wire audit trail that protects you.
  • Redundant Systems: Business Wire spends millions of dollars each year maintaining and upgrading its replicated, secure servers in San Francisco and New York.  With Business Wire you never have to worry about website continuity.  The same goes for our InvestorHQ clients too!
  • Truly Simultaneous Distribution: Somewhere in this discussion simultaneity has fallen by the wayside.  But it can’t.  In an environment that is getting faster and faster, web posting is slower.  Why reward those with multi-million dollar systems geared to scrape your website with privileged access?  Business Wire ensures simultaneity of your news delivery – – to the millisecond.  Disseminate over Business Wire and your content is ubiquitous to the world instantly.  Now that’s full and fair!

We at Business Wire are firm believers in technology and best practices.  Admittedly, our very vocal, public stance could be construed as self-serving.  Therefore, if you can counter that disseminating a full-text press release over a commercial newswire isn’t the fullest and fairest way to achieve Regulation FD disclosure, we are all ears.


A GUIDE TO GLOBAL IR: Leveraging Languages and Platforms to Reach International Investors

June 19, 2012
by Neil Hershberg, Senior Vice President, Global Media
Neil Hershberg

Neil Hershberg, SVP – Global Media

A recurrent theme at this year’s recent NIRI conference was the growing importance of global investor relations, and the corresponding need for international “best practices” standards.

The heightened industry focus reflects the realization that today’s financial markets transcend geographic boundaries, and that the competition for capital is more intense than ever.

While the spotlight on global investor outreach is certainly welcomed, the reality is that many of today’s accessible and affordable turn-key solutions are inadvertently ignored. The ability to seamlessly connect with a much larger investor universe is within easy reach of virtually every issuer; most importantly, it requires no budget-busting expenditures in the way of expanded infrastructure or staffing.

The key is to capitalize on the full potential of the major financial platforms that serve as the lifeblood of the global investment industry. Specifically, this means leveraging the multilingual platforms of the leading news/data systems, regional financial services that are hugely influential in their respective markets, and postings to non-U.S. portals that are closely monitored by the retail sector.

There is a natural tendency to narrowly view Bloomberg, Dow Jones and Thomson Reuters as largely an English-language bridge to international investors.  Yet these powerful, robust platforms reach investors worldwide in scores of languages. (Bloomberg, for example, hosts 41 languages.) This important capability is largely underutilized, and should be a strategic element of all multi-dimensional investor relations campaigns.

To be clear, English is universally recognized as the international “language of business.”  Yet there are sizeable audiences with substantial assets whose preference remains their own native languages. The major financial services, locked in a fierce competitive battle for subscribers, are keen to cater to these diverse constituencies.

Business Wire is the only commercial news wire that has committed the necessary resources to fully capitalize on this obscured opportunity. Simply put, Business Wire’s geographic and linguistic footprint is the largest in the industry, enabling public companies to target portfolio managers and retail investors in developed and emerging markets alike, reaping the unbridled benefits of these powerful platforms.

To put this potent opportunity into perspective, Business Wire releases are available in 19 languages on the Bloomberg terminal: Chinese, Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Hungarian, Italian, Japanese, Latvian, Lithuanian, Norwegian, Polish, Portuguese, Spanish and Swedish. The scope of languages available on Dow Jones and Thomson Reuters is comparable. Collectively, these financial systems approach some one million subscribers in the international investment industry.

Additionally, there are other prominent platforms popular with international investors that include Business Wire in more than a dozen languages, e.g. FactSet and Factiva.

Another important resource that is easily overlooked is the regional and national financial services that lack the profile — but certainly not the credibility or local influence — of their global industry brethren. These information providers can prove to be extremely effective in mapping an international outreach campaign with their pinpoint saturation of key money markets.

Business Wire content is broadly accessible via these respected regional providers, including SIX Information (one of Europe’s largest financial systems); vwd (a major presence in the D/A/CH region); Interfax (the dominant business news service in Russia/CIS); Agência Estado (Brazil’s leading financial news service); awp, the Swiss financial news agency; and Jiji Press, Japan’s leading financial news wire.

Supplementing these premium services, which primarily target professional portfolio managers, retail investors worldwide can routinely track corporate developments via leading financial portals, including such popular sites as Infobolsa, abcbourse, and BFMbusiness. Like Business Wire’s distribution network itself, our online reach continues to be a never-ending work in progress, with pending additions including Il Sole 24 (Italy) and Quick (Japan).

This year’s NIRI conference was entitled “Great Expectations.”  By simply leveraging readily accessible — and comparatively affordable — options, IROs are likely to experience “Great Realizations” in achieving their global outreach goals.


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