Shhhhh – It’s Quiet Period

28 September 2007

Prior to IPOs and any financial results announcement companies go through what is usually called a “quietQuiet period”.  Quiet periods are designed so that members of company management don’t engage in what is called selective and unfair disclosure.  Selective and unfair disclosure is a fancy term for management spilling the beans about important company information before the general public is aware of that information.  The most famous and recent case of a quiet period misstep was Google’s interview with Playboy ahead of their 2004 IPO.

The problem that I have seen with quiet periods over the years is that there are no standards.  I know of companies who have a 3 or 4 day quiet period before a quarterly earnings call, and others who have a 3 week quiet period.  Some companies are willing to communicate with the investment community about certain areas of the business during a quiet period while others go completely dark.

Don’t get me wrong, I fully appreciate the fact that every company and every sector is different and that these differences need to be taken into consideration when setting quiet periods.  I also appreciate that more regulation in the public markets is the last thing anyone needs.  However, what I think would be useful for public companies and investors are some formal guidelines on quiet periods.  It can only help in the quest for truly fair disclosure.

One Response to “Shhhhh – It’s Quiet Period”

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    Jocketty out as Cards' general manager …Blogged about at Shhhhh – It’s Quiet Period – anil dilawri, Walt Jocketty is out as general manager of the St. Louis Cardinals, one year after the team won the World Series for the first time since 1982. I

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