Hans Hawrysz, Executive Vice President, Corporate Strategy at CMGI (Nasdaq: CMGI) couldn't answer most questions the audience of fund managers and analysts asked him at Prudential Securities' "Technology and Telecommunications" conference at New York's Plaza hotel this week.
All he could tell inquirers into specifics on the company's financials was that the company would be giving guidance within a few weeks. As to what exact day the company would make the announcements, Hawrysz could only say that, "given the FD ruling, we'll have to let tell you that some time 48 hours or 7 days in advance."
Regulation FD, for fair disclosure, has gotten a lot of negative press since it started Oct. 23. The rule was intended to eliminate "selective disclosure" -- when a company allows privileged analysts and large shareholders access to information. But the regulation is said to block communication between Wall Street analysts and the companies they cover, since companies can't answer many analysts' questions without issuing a formal press release.
Many fear increased market volatility as analysts become less adept at guiding investors. The ruling has also been blamed for drawing out conference calls, where executives now go over minutia with analysts that they used to go over in private.
Conference attendees weren't perturbed by the tight-lipped presenters, though many executives felt frustrated by the ruling.
Hans P. Utsch, president of The Kaufmann Fund, said, if anything, the regulation will force companies to give more detailed information out, though he is concerned about increasing market volatility.
"I don't see a lot of difference," said H. Giles Knight of Allied Investment Advisors. "But I guess the benefit of going to this kind of conference is slowed down," he added. Though clients of Prudential don't pay to attend, many of them might as well not bother with the travel and hotel charges, Knight said.
Margaret Smith, CFO of Celeritek (Nasdaq: CLTK), admitted the value of going to this kind of conference might be abetted by the regulation, but added that people always tend to ask the same questions, so she's not often asked to give out previously undisclosed information anyway.
You're not going to hear anything at these kind of conferences that’s not public information, Hawrysz admitted. But he still believes there is value in attending; "the conferences are as much professional and social interaction," he said.
"The only people making out on this are the law firms," he added. "We find we're going to lawyers every day now."
Pat Costa, CEO of Robotic Vision Systems (Nasdaq: RSVI) said the regulation didn't affect his presentation, but only because the company was reporting earnings in two days. "There's still a lot of confusion about how to act," under the new ruling he said, but he doesn't think it’s a bad thing. "The plight of the analyst," he joked. "They'll have to earn their million dollars a year."