Absolutely. Quarterly reporting is enormously expensive.
The average Nasdaq firm spend 850 hours per quarter purely on earnings. It’s absurdly burdensome.
It is part of the reason companies don’t want to go public (it’s not the only reason, obviously). But the harder you make it for companies to go public, the more will stay in private markets.
Then the only companies going public are going to be the ones that aren’t hot enough to stay private. Then retail will lose out on a lot of good growth companies.
And you could say, “well let retail invest in private companies” but that makes the information asymmetry problem even worse. Because now instead of investing in companies with biannual reporting, retail is investing in companies with no reporting at all. I guess you could say “well make private companies have to report more” and now you’ve just created a public market again.
The average Nasdaq firm spend 850 hours per quarter purely on earnings. It’s absurdly burdensome.
It is part of the reason companies don’t want to go public (it’s not the only reason, obviously). But the harder you make it for companies to go public, the more will stay in private markets.
Then the only companies going public are going to be the ones that aren’t hot enough to stay private. Then retail will lose out on a lot of good growth companies.
And you could say, “well let retail invest in private companies” but that makes the information asymmetry problem even worse. Because now instead of investing in companies with biannual reporting, retail is investing in companies with no reporting at all. I guess you could say “well make private companies have to report more” and now you’ve just created a public market again.
https://www.businessinsider.com/quarterly-earnings-proposal-...