Investment bank follows similar move by Goldman Sachs
JPMorgan Chase moved its fourth quarter and full-year results from the newswires to its IR website last week, following a similar move by Goldman Sachs in October.
Rather than publish its full financials via Business Wire as it has in the past, the investment bank opted for a short release simply advising the investment community that the results were available on the firm’s investor relations website.
When Goldman Sachs made the same move in October, the bank explained that it was looking to ‘simplify’ its earnings release process. Despite this, many pointed to the hacking of a number of newswires in August 2015 as a potential push for some companies to moving their financials.
Fifty-four-year track record
While acknowledging that ‘no one is immune’ from cyber-attacks, Business Wire – JPMorgan Chase’s newswire of choice – explains in a statement to IR Magazine that it ‘expends a great deal of resources… to ensure Business Wire’s networks are safe and secure. We place a huge and ongoing emphasis on protecting our clients’ sensitive information and our track record these past 54 years has been excellent.’
For Vitor de Souza, vice president of global communications at cyber-security firm FireEye, this isn’t simply a question of which website is more secure, especially as the banks might be targeted more often and so could face a tougher challenge. ‘In this case it is not about which website is safer,’ he says. ‘It is more about who you want watching over your assets.’
Companies might simply want to take care of their own security but, regardless of who can best protect sensitive releases, Sandra Novakov, director of the IR team at Citigate Dewe Rogerson, points out that cyber-security has become a growing concern for IROs. ‘When you look at the number of breaches companies have had globally, the cost of dealing with these has become much more of an issue for investor relations,’ she says. ‘It’s become something investors ask about when they meet the management team and see the IRO.
‘Does [moving the financials away from a newswire] remove the threat completely? I definitely don’t think that’s the case. But to what extent it lowers the risk [of being hacked] is hard to tell from the outside.’
The benefits of the wires
A number of other big investment banks told IR Magazine they have no plans – yet – to change the way they release earnings. And even if security is a factor when deciding which channels to use to publicize financials, Novakov says newswires have a lot to offer, especially for smaller companies.
While large companies such as JPMorgan Chase or Goldman Sachs have a huge following and thus no issues in terms of visibility, she explains, smaller companies benefit from the wider distribution offered by newswire services.
‘If we look at the expectation that sell-side research for smaller companies will diminish further in the future, these companies will probably want to use as many channels as they can to put their announcements out,’ she adds.
Of course, JPMorgan Chase’s move doesn’t mean it’s giving up newswires by any means. Giving advance notice of the change earlier this month, the firm said that while it would ‘not issue a press release over a wire service containing its full quarterly earnings results this quarter’, it would notify investors via Twitter, using its handles @JPMorgan and @Chase, and by press release through Business Wire.
‘Additionally, subscribers who have signed up to receive news directly through JPMorgan Chase’s investor relations website will continue to receive a notification of the results,’ the bank added.
The firm has since published other, non-financial press releases through Business Wire, with the global newswire maintaining that ‘JPMorgan Chase and Goldman Sachs continue their long-standing relationship with Business Wire.’