Skip to main content
Apr 30, 2015

How to avoid a Twitter-style leak

The focus needs to be on people and technology, says IR website provider

It’s not been a great week for Twitter’s results or its investor relations. On Tuesday, the company was due to release its earnings after market close. But then the results were leaked – in a cruel twist on Twitter itself – by data mining firm Selerity.

The results were not good. Twitter missed its revenue target and also cut full-year guidance, so the market would almost certainly have reacted negatively anyway. The circumstances, however – with the news appearing while the market was open and in a leaked manner – likely contributed to downward pressure on the stock. Over the next two days, the share price fell by around a quarter.
The microblogging site quickly pointed the finger at NASDAQ, which operates the company’s IR website, for the leak. NASDAQ admitted it had accidentally put the results in a place for a short period – less than a minute – where they could be pulled by a data miner.

‘The posting was caused by an operational issue that exposed the release on Twitter’s IR website for approximately 45 seconds,’ a NASDAQ spokesperson told the Financial Times. ‘During those seconds the site was scraped by a third party that publicly disseminated the earnings information. We regret the incident and remain fully committed to providing the highest-quality investor relations communication product and services to our clients.’

This is far from the first time a leak like this has occurred. Last October, JPMorgan saw its results appear early in a similar fashion. There was also a slew of leaks four years ago that affected companies like Microsoft, Transocean, NetApp and Walt Disney.

Data miners and news organizations employ bots to constantly scrape websites for this type of content, so public companies and their support firms need to understand how to safely handle financial documents in the run-up to results announcements.

‘It really comes down to two things: people and technology,’ explains Bradley Scott, associate director at SNL IR Solutions, an IR website provider. ‘Firstly, public companies must ensure they control all aspects of how and when their earnings data (or any material information) is distributed, especially when dealing with a third party. They need to make sure whoever comes in contact with non-public information is fully aware of the risks and catastrophic consequences should these be released prematurely.’

Secondly, these situations can be largely avoided through technology, Scott continues. ‘Companies must ensure non-public information is safely secured behind a firewall,’ he says. ‘It doesn’t matter if the page hosting the documents is not public; the documents themselves must be secured. This same occurrence has happened to a number of companies over the years, and it’s always because the document’s URL was publicly accessible prior to being published on the IR website.’

Bradley Smith, director of marketing at PR Newswire, used his blog to highlight the benefits automation can bring to the process, where the results are sent out from a newswire to all other sources at the same time. ‘It’s not difficult to enable, but it does require configuration and quality assurance testing,’ he wrote. ‘Please don’t try to knee-jerk automation in for this quarter.’

Whatever system a company uses, however, it is always at the risk of human error. Indeed, that’s why most of these leaks occur, with someone placing a document in the wrong place, or pressing the wrong button at the wrong time. The Twitter leak serves as a reminder for all companies to check up on their results release processes.