"Earlier this week, President Donald Trump wrote on Truth Social that companies should only have to report earnings twice a year-versus every quarter. " This will save money, and allow managers to focus on properly running their companies," he wrote. "Did you ever hear the statement that, 'China has a 50 to 100 year view on management of a company, whereas we run our companies on a quarterly basis???' Not good!!!""
"In case you didn't already think tech investing was a wild ride, imagine investors having to speculate what's going on during six-month waits between reports. Well, maybe you don't have to imagine that hard. In private markets, startups can be rather selective in what they disclose to investors-and when they choose to disclose it. Investors who don't have board seats often have no idea what's going on in a private company unless a startup is gearing up for a fundraise (or if the investors have close connections to the company's executive team and its board)."
"The fact that public CEOs have to get on a call, tell the world what happened over those last three months, and then answer questions about it means that we have transparency. As we all know, a lot can happen in six months. Remember when Silicon Valley Bank collapsed in less than a week? It was only during earnings season that we found out who else was exposed to it."
President Donald Trump proposed that public companies report earnings semiannually rather than quarterly, saying it would save money and let managers focus on operations. Some investors and CEOs support less frequent reporting to encourage longer-term decision making and reduce short-termism. Private markets already permit selective disclosure, leaving many investors without timely visibility unless a company seeks funding or provides board access. Reducing public reporting frequency would increase investor speculation during longer gaps, reduce transparency, and could delay identification of systemic exposures, as rapid crises like the Silicon Valley Bank collapse were revealed during earnings season.
Read at Fortune
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