Don’t pass Go. I will give $200 to the first person who correctly answers two questions.
Only corporate IROs may answer. Apologies to the rest, but you’ll see why. Corporate IR pros, look up and write down your trading volume on March 4. First question: Where did your shares trade?
Second question: Which brokers executed the trades that, when added up, equaled that volume you wrote down for March 4?
Yesterday, Dow Jones reporter Jacob Bunge wrote about our drive to organize companies to petition Congress and regulators for more transparent data about their share-trading.
There’s a landing page on our website for the letter we’ve drafted. Our goal is to list 100 companies as supporters when we deliver this letter. It should be 5,500. I’ll tell you why in a moment.
Please read the letter, copy the talking points, set a meeting with your CEO, CFO and General Counsel, and explain why your company must support the initiative – which is free and requires no more work than adding your name to the list.
Why should you and 5,499 other companies support it? Permit me to be blunt. Many investor-relations professionals don’t know what they don’t know. If you knew which brokers traded your shares on what markets, you’d generally understand your share movements.
It need not be real-time. IR folks aren’t traders or investors. But 24 hours after the trading day, you should know where your shares traded and which brokers executed trades. If, for instance, the same group handles a bunch of volume during options expirations, well, that’s probably what they do.
Ten years ago, you could see a lot more. On the floor of the NYSE, specialists had 85% of the book for a given NYSE issuer. At the Nasdaq, almost all the volume could be tracked, save smatterings at ECNs. I was an IRO and downloaded my data every day.
Today, about half your volume flows invisibly into a consolidated tape. Another chunk executes or reports at other exchanges like BATS and Direct Edge. That means you see a third or so. We can apply mathematics and rules and track behaviors with stark accuracy because it’s a rules-driven marketplace. But you – there in the IR chair – are entitled to complete information. You are a member of the capital-markets community, not a side show.
It’s not the fault of listing exchanges or alternative markets. It’s how the rules work. Everybody forgot that public companies need data too, and rules left them standing by the roadside in 2001.
If companies want better data, they must ask for it. Comprehensive trading data is a baseline necessity for making informed decisions about your currency – your listed shares. It’s a fiduciary corporate responsibility to know where your shares are trading, just as the head of sales has got to know the distribution channels.
I’ll paraphrase our vice president and say it’s a big…deal. The door is wide open for public companies to enter the 21st century in our capital markets. You’ve got to walk through it.
So take my challenge. Try to figure out where our shares are trading. Then, ask your CEO and CFO to back this initiative so you all can have answers rather than questions.
