Google inadvertantly announced their financial results early today by filing their 8-K earnings release about 4 hours before the market closed. Making it worse, they had a lackluster quarter and the price immediately plunged. They fairly quickly closed trading, but what a disaster...apparently their market cap dropped 20 billion or so. I work for a public company and this sort of thing gives me nightmares. I'll probably wake up at 3 am tomorrow morning screaming "don't file it, do NOT file it!"
In my ignorance, why is the timing such a bad thing? I mean, if the earnings reports were that bad, wouldn't the prices (and therefore market cap) just drop tomorrow or whenever the news eventually came out?
Not everyone was watching for their earnings report ahead of scheduled time. Those who stumbled onto the info benefited.
From Google's standpoint, they would much rather release earnings right after the markets close and right before they do their earnings call so that they can make sure investors fully understand what the earnings release means. Analysts ask a lot of questions during the calls and it's an important part of getting the message out. It also allows investors time to digest the info and make a more informed decision when the markets open the next day. The way that it happened, people who saw the info right away likely dumped their shares fast just to beat the rush and the price had fast and big downward momentum. It was more about reaction than an investment decision on the merits. Legally, I don't think they probably did anything wrong, but it was just poorly done. Prophet might be right...it's a good time to buy if the market really did over react. That said, I'm no Google expert and I have no idea if the market over reacted.
If you are an accountant (i think you are) then I don't mean to sound so basic but . . . if you are over invested in one stock because you work for the company and get stock options along with a stock purchase program, sell a large portion and diversify. That way you you can sleep and not worry about losing 20% of your savings in one day.
No, not an accountant, but I work on my company's filings. It's not the dollar drop that'll give me nightmares, it's being the guy to make a mistake like that. In Google's case, it was an outside financial printer that filed the earnings release too early, but I could easily imagine it was caused by a miscommunication between the printer and the Google employee who handles filings.
actually its their printers. http://www.rrdonnelley.com/ oops. probably whomever their accounting firm is too.
