NEW YORK: Six months after NASDAQ accidentally published JPMorgan's quarterly results hours ahead of schedule, the stock exchange’s reputation is in the spotlight again for prematurely releasing Twitter’s earnings.
NASDAQ’s top priority should be explaining how it's going to fix the situation since it’s a recurring issue, says Dix & Eaton senior MD Lisa Rose.
Twitter was due to announce Q1 earnings after close of trading on the New York Stock Exchange, where the company is listed. However, the information was released around 3:00 pm EST time on the technology-led NASDAQ-run investor relations page for Twitter yesterday. The gaffe wiped $8 billion off of Twitter’s value.
A NASDAQ spokesperson told PRWeek that the stock exchange’s subsidiary Shareholder.com, which is a communications and IR intelligence service, inadvertently posted the Twitter earnings release prematurely on their investor relations website yesterday.
Basically, it was an operational issue, the rep added. Although the post was only online for 45 seconds, financial intelligence platform Selerity picked it up and tweeted out the earnings information.
"We certainly regret the incident and are fully committed to providing the highest quality of IR comms products and services to our clients," the NASDAQ spokesperson said.
Representatives from NASDAQ declined to comment further about how the company intends to manage its reputation following this incident.
NASDAQ has been grappling with technology snafus for years. Aside from recent issues, technical glitches stopped the stock exchange from offering shares on schedule during Facebook's public debut in 2012. At the time, NASDAQ blamed the design of the software it uses during IPOs.
"They need to protect their reputation, so they need to explain to Twitter and everyone else what they are doing to make sure it doesn’t happen again," Rose said.
One way the company could show its effort to right its wrongs is to partner with Selerity to figure out how they can prevent this from recurring, Rose suggested.
She added that NASDAQ should reevaluate how it distributes news. Large companies, such as Twitter and Google, tend to use their websites as the main form of distribution for material news, which leaves more room for human error.
"Sometimes companies, analysts, or investors will type in a website address where they think information for the next quarter will be, and they can find news that isn’t meant to be published yet," Rose said. "This is one of those lessons you learn the hard way with technology."
Meanwhile, smaller, less recognizable companies are still using newswire services to issue releases.
"This type of mistake doesn’t typically happen if a newswire service is used," Rose explained.
Because the information was released ahead of schedule, Twitter had to halt trading and answer calls about how the earnings got released.
"Twitter’s IR team had to deal with this issue on an already very busy day," Rose noted. "This really created a nightmare for them and disrupted their process."
Usually, an earnings announcement is an extremely controlled process. Companies are quiet until they hold a conference call. Typically they send a release out around the same time, and then take follow-up calls.
If problems persist at NASDAQ, clients may become frustrated or untrustworthy of the technology the company uses, warned Rose. The stock exchange also runs the risk of listed companies switching to other exchanges, she added.