MARKET ANALYSIS
Timely access is money when it comes to marketplace information. That's why Legato Systems shareholder Mark Coker was more than a little miffed when he couldn't join a conference call between company execs and investment bank analysts who cover the data-storage firm. Their behavior, says the 34-year-old publicist, "smacks of selective disclosure."
"It didn't matter whether I had 3,000 shares or one share," Coker says. "I was an owner and I should have been allowed to hear what they were saying."
Analyst calls, which usually coincide with earnings reports, provide some of the best dope about a firm's performance and prospects. But that same tightly held info served as a barrier to entry. So after dumping his Legato shares, Coker got to work on BestCalls.com, a site he designed to prompt companies to open analyst calls to the investing public. (The National Investor Relations Institute estimates that of the 3,000 or so companies that make such calls, just over half allow some public access.) The site lists upcoming calls for about 700 companies and gives details about how to listen in. Between its March launch and mid-July, BestCalls.com signed up 42,000 subscribers.
Coker, of Los Gatos, California, has spent more than $100,000 on the project, which he sees as both pragmatic - "a TV Guide to Internet conference calls" - and revolutionary. "This is my chance to equalize the distribution of information for small shareholders," he says.
BestCalls' success hinges on persuading public companies to open their calls to their shareholders, and that, in turn, requires educating investors so they keep up demand for access. Most small-time shareholders aren't even aware of the analyst calls, Coker says. And most companies, he adds, like it that way. That attitude is illustrated by IBM, one of the companies Coker has tried and failed to open up. "We're more comfortable with individual investors getting an account of the calls from the analysts," says Hervey Parke, Big Blue's director of investor relations, referring to the traditional brokerage reports and selective press briefings. In the opposite camp, Deutsche Banc Alex.Brown analyst Jim Marks says flatly that everyone should be able to dial in, "to the extent that it's technically feasible."
"Right now," Coker says, "we're a gnat on the rear end of an elephant. But as we gain strength, the market is going to listen."
BestCalls.com: www.bestcalls.com.
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