Goldman Sachs plans to announce its quarterly earnings on Twitter. This is a major change for the investment bank which has traditionally used independent business wires for such press releases.
These independent business wires have fallen out of favor in recent times, as several have experienced glitches and released the personal information of their clients. Others have been hacked, allowing traders to gain early access to critical information.
Goldman Sachs is making the transition in order to obtain more control over the release of information that might affect financial markets. The investment company has reportedly considered making such a change for a long period of time.
Other companies have also made similar changes for the purpose of preventing important pieces of information from being leaked to the public.
CEO of Business Wire Phyllis Dantuono has stated that she has taken calls from almost 50 concerned clients that their information was not secure.
Business Wire is one of many companies owned by Warren Buffett. The company is paid by about 3,000 companies in the United States for the purpose of distributing news. Business Wire runs approximately 180,000 news releases every year.
However, Dantuono is not concerned over what she says is a small loss of business.
Dantuono said, “Yes, there have been a handful of companies that are trying new ways of doing things. We think there’s considerable downside to limiting distribution to just its availability on a website.”
Dantuono went on to state that Business Wire will remain in contact with officials from Goldman Sachs and that the company expects to work with Goldman Sachs in the future.
Other press release agencies are similarly unconcerned.
CEO of PR Newswire Robert Gray said, “Press release distribution is designed by its nature to reach a broad audience, beyond those who may follow a company’s website or social media and may derive market advantage by doing so. The recurrent news of hacking incidents makes it clear that no technology or system, not even those of our leading financial institutions, can be immune to penetration.”
Last year, Shareholder.com accidentally released information regarding the financial earnings of JPMorgan Chase earlier than it should have. Early traders in the United States took advantage of this event.
Meanwhile, experts understand the recent decision by Goldman Sachs.
Professor of Georgetown University’s School of Business James Angel said, “The question is, ‘why spend the money if you don’t have to?’ Goldman is in a position where everyone wants their information. The more systems the info goes through, the more chances for something to go wrong.”
While it’s smart of Goldman Sachs to be proactive, this does not guarantee that the company’s information won’t be unintentionally exposed. In the past, other companies, such as Gap and MetLife, have accidentally revealed their own quarterly earnings before they intended to make the announcement.