NOKIA Corporation (NYSE: NOK) last week became the latest company to use the advisory news release process that IR Web Report has long urged companies to adopt for disclosure information.
The mobile phone maker’s US PR wire earnings release on July 22 consisted of a 41-word alert issued through PR Newswire that linked to the full-text release on the company’s investor relations website.
The Finland-based company’s previous US PR wire earnings release was roughly 6,800 words. Based on standard rates for national US distribution, the Q1 release would have cost Nokia in the region of $14,000, whereas the new advisory release costs just $700.
That’s still a ridiculous fee for 41 words, but PR wires generally set a minimum fee for the first 400 words. Here’s what Nokia’s release last week looked like:
Step to Reg FD-compliant website
Nokia follows a growing list of companies that have moved to an advisory release process for earnings and other releases. Doing so cuts their disclosure costs while boosting the role of their IR websites in the disclosure dissemination process. Google Inc. (NASDAQ: GOOG) has dispensed with PR wire earnings releases entirely.
As we explain in the New Online Disclosure, driving traffic to a company’s IR website is one of the steps US-listed firms must take for their websites to meet the public disclosure requirements of Reg FD.
Having a Reg FD-compliant IR website is a valuable safety-net for companies, especially those whose executives and other employees are increasingly communicating online, including via blogs and social media. Full-text PR wire releases undermine company IR websites from becoming Reg FD compliant.
It should be noted that Nokia did distribute a full-text version of its earnings release via the insanely complex and fragmented European regulatory filings system, and via the more efficient EDGAR system in the US.
These regulatory filings are part of an effective web disclosure process as they provide an indelible record of the disclosed information.
Extract more value
Based on the lack of evident negative feedback, Nokia’s new US advisory release appears to have worked fine for investors and the media. However, it falls short of best practice in some respects.
The advisory release links to a 26-page PDF file rather than to the HTML version of the release that is available on Nokia’s website. It’s best to link from advisory releases to HTML releases to meet the SEC’s formatting guidance. A PDF version should be provided as an extra option, but not as a replacement for HTML.
Nokia’s PDF version is not formatted using the “Fast Web View” setting. That means users have to download the release in full before they can read it, which obviously slows down access to the information, particularly over slower connections.
And while we applaud brevity, Nokia should have extracted more value from the PR wire’s minimum fee by expanding the release to include other important information that can facilitate achieving a Reg FD-compliant website. In our guidelines, we provide several model advisory releases.
Nonetheless, it’s good to see a high-profile company like Nokia demonstrating that advisory releases are as effective for US-listed international companies as they are for US-based ones.
- Learn how to get your company on the path to web disclosure in IR Web Report’s in-depth guidelines.
Dominic Jones (bio) created IR Web Report in 2001. He is a consultant to leading public companies and investor relations service providers worldwide. You can contact him via the contacts page.
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