Sun CEO Jonathan Schwartz is advocating cutting out the middle man -- in this case, the media -- in disclosing corporate news to the public, preferring to bring that information straight to the people via the Internet.
In his public blog, Schwartz shared a letter to the SEC this week, in which he asks that the blogosphere and RSS be made acceptable means of disclosing to investors and the public "issues that'd be deemed material to Sun's financial performance."
Currently, he says, Sun and other public companies need to "hold anachronistic telephonic conference call, or issue an equivalently anachronistic press release, so that the (not so anachronistic) Wall Street Journal can disseminate the news" so as to be compliant with Regulation Fair Disclosure (Reg FD).
Reg FD, Schwartz notes, "attempts to ensure no one audience gets preferential access to material non-public information. It's a great concept, designed to prevent selective disclosure, or actions that might advantage one investor over another."
However, he contends that those press releases and conference calls aren't as readily accessible to the world as is a posting on a freely accessible Web site. He says in his letter to the SEC that
"My blog is syndicated across the Internet by use of RSS technology; thus, its content is 'pushed' to subscribers. This website is a tremendous vehicle for the broad delivery of timely and robust information about our company. It is our view that proprietary news outlets are insufficiently accessible to the broad majority of Internet users and individual shareholders. It is certainly the case that the Internet represents a broader user base than those able to afford subscriptions to traditional forms of media ... ."
It's an interesting proposal, certainly. As a journalist, I've come to prefer reading about news announcements in blogs instead of in press releases. The tone of the latter tend to be so laden with cliche market-speak (how could every single company out there be a "leading provider"?), they sometimes border on incomprehensible.
Blog posts written by real people, on the other hands, tend to be more engaging and not quite as sickeningly sugar-coated.
But that's more a style issue than a dissemination issue, isn't it? The question at hand is, would investors and the public be better served if they could get company information immediately, from the source?
Well, in some ways, I'd say yes. It would make perfect sense for people interested in getting news of "issues that'd be deemed material to Sun's financial performance" -- or whatever company interests them -- to have that information show up in their e-mail boxes or RSS readers at the same time it reaches journalists. There's really no reason that shouldn't be an option right now.
But I don't know that Schwartz would be successful in cutting out the media middle man entirely, if that's his aim. For one thing, if I want to keep abreast of Sun news and suddenly can't expect a formal press release, for some reason, I'd just subscribe to whatever RSS feed was appropriate.