Subject: Information Sources - Conference Calls

Last-Revised: 29 May 1999
Contributed-By: John Schott (jschott at

Companies listed on the various stock exchanges have long held analyst conferences to spread their message to the investment community. Often, sponsors such as Hambrecht and Quist have held conferences where investment professionals could hear many firms in several days. To accomodate those who couldn't travel, the conference call allowed hundreds of analysts to hear a presentation and ask questions in real time. But access was usually restricted to investment professionals and often involved long-distance toll charges. Occasionally a friendly broker would loan you his access codes, some of which found their way to the Internet. As a result, conferences could be swamped.

The Internet now provides a much more practical venue for the conference call. With its low cost and ability to accomodate many listeners it is now practical to open a conference call to almost anyone (at least to listen). Many firms now do. For example, a recent article in the Wall Street Journal related how IOMEGA does this as an efficient way to control the irresponsible babble on Internet bulletin boards. People posting idle chatter now attract accurate responses from others who have heard the actual story on a conference call. As a result, the irresponsible postings are controlled.

Naturally, investment professionals complain that this allows the novice to access raw information that needs interpretation by someone more knowledgable - namely such a professional. However, companies like the ability to make one public statement, and then be free from goverment limitations on how investment information must be released. And individual investors like it too, as access to this information gets them access to information that once only slowly reached the average investor. Even Chairman Levitt of the SEC sides with the theory of greater access for the masses. According to an article in the 24 May 1999 issue of the Wall Street Journal, the NASDAQ has even funded a pilot program to pay for public access to conference calls. Firms such as DELL and Cosco are early participants.

Using the Internet has many advantages besides the instantaneous international release that results. It is possible to save the audio files so that the call can be accessed later at a more convenient time. Plus it would be possible to edit out meaningless portions to provide sort of a "Cliff Notes" of each conference. Naturally, there are some limitations. If everyone could ask a question, real brawls could result as the conferences became uncontrolled. So most Internet systems limit who can ask a question.

An outstanding advantage for the average investor is to witness directly a firm's management in action. While the information might be the same, an investor gains confidence in management that presents a virtuoso performane over one that is defensive, hesitant, and obfuscative. The details aside, the speed of responce and other items that don't get incorporated in an analyst's report can add a lot to one's understanding. Previously, a small investor's only such access might have been at a company's annual meeting.

Several firms have opened to provide investment-related conference-call services in one form or another over the Internet. Some require membership and user fees, but the trend seems to be toward company funding of the low cost service, and free or very low cost access by the public. According to the WSJ article mentioned above, firms now providing some for of access include: Vcall (Philadelphia), (Dallas), (Street Fusion, (San Fransisco), and (Boston). Expect that more and more firms will offer the public Internet conference call. Encourage firms you are interested in to do so. This form of communication is yet another form of ultimate corporate democracy.

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