SOMEBODY please explain to me why an institution that plays such a central role in the capital markets as the Nasdaq Stock Market, Inc. seems to have such a hard time writing transparent news releases.
Yesterday, the exchange issued a less than forthright news release that had the effect of confusing at least one reporter from Bloomberg into thinking that the SEC had approved the exchange’s plan to bundle investor relations services into its listing fees.
Here’s the full Nasdaq news release:
NASDAQ New Listing Fees Approved by Securities and Exchange Commission
NASDAQ Announces That Companies Can Enroll for New Sample Package of Corporate Services
NEW YORK, Feb. 5, 2007 (PRIME NEWSWIRE) (PRIMEZONE) — The Nasdaq Stock Market, Inc. (Nasdaq:NDAQ) today announced the new fee schedule for NASDAQ-listed companies has been approved by the Securities and Exchange Commission. The new annual fees for NASDAQ’s Capital, Global Select and Global Markets are effective as of January 1, 2007.
Additionally, NASDAQ announced that its companies may enroll through NASDAQ Online (www.nasdaq.net) for a sampling of core services designed to support public companies. These services include news release distribution and EDGAR filings through PrimeNewswire, a news wire distribution service; audio casting and dynamic annual reports through Shareholder.com; and D&O Insurance Benchmarking from Carpenter Moore. The core services are available to all NASDAQ companies that choose to use them free of charge. These services are also available to companies listed on other domestic exchanges on a trial basis.
In accordance with NASDAQ’s philosophy of offering corporate services as an integral part of the listings value proposition, all NASDAQ-listed companies benefit from a portfolio of exceptional services and informational programs.
“The services we offer provide companies and investors with greater visibility, deeper market intelligence, and competitive context on hot-button topics such as corporate risk management,” said Bruce Aust, Executive Vice President of NASDAQ’s Corporate Client Group. “The services are in keeping with our mission to support public companies, to enhance competition, and to provide investors with a transparent view of the marketplace.”
Additional information on NASDAQ fees is available at www.nasdaq.com/about/listing_information.stm. Additional information on NASDAQ’s core services offerings to public companies is available at www.nasdaq.net.
NASDAQ is the largest U.S. electronic stock market. With approximately 3,200 companies, it lists more companies and, on average, its systems trade more shares per day than any other U.S. market. NASDAQ is home to companies that are leaders across all areas of business including technology, retail, communications, financial services, transportation, media and biotechnology. NASDAQ is the primary market for trading NASDAQ-listed stocks. For more information about NASDAQ, visit the NASDAQ Web site at http://www.nasdaq.com or the NASDAQ Newsroom at http://www.nasdaq.com/newsroom/.
And this is the headline and first two paragraphs of the Bloomberg article:
Nasdaq Gets Approval to Boost Fees, Offer Services (Update1)
By Edgar Ortega
Feb. 5 (Bloomberg) — Nasdaq Stock Market Inc., the second- largest U.S. equity market, won regulatory approval to raise fees and offer more services to the 3,200 companies listed on the all- electronic exchange. Higher fees are effective as of Jan. 1, Nasdaq said today in a statement.
The decision by the U.S. Securities and Exchange Commission also lets New York-based Nasdaq provide press-release distribution and Internet broadcasts of company presentations at no additional charge.
Bloomberg’s article would be nice for Nasdaq if it was true. But the fact is that the SEC only approved the fee increases and did not approve Nasdaq offering IR services to its listed companies.
You see Nasdaq withdrew its plans to offer the bundled investor relations services as part of its fees. This came after strong opposition to its plans from a wide range of issuers, competitors and other commentators.
In its notice approving the fee increases, the SEC made it clear that it was approving the fee increases but that the question of whether Nasdaq should be in the IR services business at all is “beyond the scope of this proposed rule change, since Nasdaq has removed its initial offer of products and services.”
So why tie the two issues — the fee increases and the IR services — together in a news release when the Commission did not explicitly rule on the IR services? It’s not as if Nasdaq was trying to save money by issuing a single news release. It owns the newswire service!
The simple answer is that Nasdaq has a culture problem. And it’s on display for all to see… including the SEC.
Update: The New York Times carries the same Bloomberg piece, errors and all.
Update 2: Feb. 06, 6:27 pm — Bloomberg issued a corrected story a couple of hours ago.
Nasdaq Gets SEC Approval to Increase Listing Fees (Correct) 2007-02-06 16:01 (New York) (Corrects to delete reference to approval of additional services in the first paragraph of story published yesterday.) By Edgar Ortega Feb. 5 (Bloomberg) -- Nasdaq Stock Market Inc., the second- largest U.S. equity exchange, won regulatory approval to raise fees paid by the 3,200 companies listed on the all-electronic exchange. The U.S. Securities and Exchange Commission approved the higher fees, which are effective as of Jan. 1, Nasdaq said today in a statement. The exchange also said it will offer companies services such as press-release distribution and Internet broadcasts of company presentations at no additional charge.
Bloomberg impressed me by how they handled this. I got two emails from Edgar Ortega keeping me abreast of their actions.
Having been a reporter, I can tell you that things like this would really piss me off. Often you get a call from a source who says they have a release coming out soon. They “groom” you on what to expect and you start working on your story. When the release finally comes out, you’re ready while the other reporters are still trying to parse the news. Only problem is the story you have is pushing the source’s preferred slant. Stuff like this gives the public relations profession a bad name with journalists.
And again, Nasdaq should know better.