Perhaps we should invert the law and make it criminal for publicly traded companies to keep material information secret. Having an unexpectedly good or bad quarter? Give us updates every week.
Why weekly? Why not daily? Or hourly? I'll tell you why...
In big business, quarterly is often as close to "frequent" as one can get. Contracts take weeks if not months to negotiate, net 60 or 90 payment terms, hold backs, terms on goods in transit, etc. For some complex businesses, teams work on nothing but figuring out quarterly filings.
But businesses work on an accrual basis: once the contract is closed, and you can reasonably assume that some influx of capital is real, you put it in the accounting system.
And then: if I am a shareholder, and I own part of the company, why can't I have access to the internal not-yet-audited general ledger status? It's my company, right? It should be feasible to give me access to a secure site where I can get the information...
I believe the real reasons, rather than technical infeasibility, are mainly two:
- Extreme "corporate governance": If shareholders can react on every minute transaction that you do, and they effectively micromanage the company, there is still more incentive for short-term thinking (a problem that a lot of listed companies are already very familiar with).
- Strategy: If competitors can buy one of your shares, they would get access to all your information. You can still do the same, though: on public companies, information is either public, or private. But who is going to start? Who is going to rush to be open to the competitor?
