SLOPPY web publishing practices by Microsoft Corp. (NASDAQ:MSFT) enabled a high-speed news technology company to pick up the tech giant’s earnings release from a staging URL and publish the results more than an hour before its scheduled release.
Ryan Terpstra, founder and CEO of Selerity, based in Jersey City, NJ, confirmed to IR Web Report that his company’s search spider discovered Microsoft’s Q2 2011 earnings release on the company’s website by guessing the URL based on past ones the company has used.
This is the same practice that has resulted in earnings leaks at The Walt Disney Company and Netapp Inc., but in those cases Bloomberg caused the leaks. There is nothing underhanded about the practice of checking expected URLs, which is common practice among journalists and even expressly condoned by media services like Reuters.
For its Q2 release Microsoft used the following URL:
The prior quarter’s release was posted at this address:
Merely by changing Q1 to Q2 in the URL, anyone could have accessed the release prior to links being posted to it on Microsoft’s IR website homepage.
“Our search technology discovered Microsoft’s earnings release on a public URL,” said Andrew Brook, Selerity’s chief technology offer. “We reviewed the retrieved information, satisfied ourselves that it wasn’t a draft or old information, and then distributed it to our customers.”
StockTwits users among first to get news, report it publicly
Selerity first posted the news to its premium service on StockTwits, the Twitter equivalent for investors, at 2:50pm ET – more than 70 minutes ahead of its scheduled release. Media outlets mistakenly reported that the news was out only 15 minutes before the market closed.
Selerity uses proprietary low-latency search and extraction technology, combined with human analysts, to pull breaking news from primary sources like company websites and other media. Its customers include hedge funds, individual investors and media outlets.
After the news broke, Microsoft was forced to issue an advisory news release via Market Wire 3 minutes before the close informing investors that the results were available on its website.
Update: Bloomberg has now covered this story.
Microsoft’s IR general manager Bill Koefoed issued a statement saying: “A preproduction draft of our earnings release was discovered by one or more media sources who then published our results to the Web before market close. After consulting with NASDAQ, we have posted our official numbers. We apologize for any confusion and will review our procedures to ensure this does not happen again.”
Last quarter, Microsoft messed up when the release announcing the availability of the results was about an hour late. Back then, Koefoed said they’d iron things out by this quarter.
Howard Lindzon, CEO of StockTwits, has posted more about Selerity on his blog.