INVESTORS in US-listed stocks will notice something different this quarter when they visit Yahoo! Finance to catch up on the latest corporate earnings results.
For the first time, they will have free access to full-text transcripts of earnings conference calls on approximately 2,500 companies thanks to Seeking Alpha, a firm started by former Wall Street research analyst David Jackson.
Previously only deep-pocketed institutional investors and corporations could afford access to expensive earnings call transcript services. Earnings call transcript portals are popular with professional investors because they make it easier for them to cover a large number of companies’ earnings calls.
Retail investors have typically been priced out or excluded from these professional services. Instead, they have relied on companies’ investor relations departments to post transcripts on their websites, or they’ve been forced to pay service providers between $49 and $100 for a single transcript.
Six-hour turnaround
However, now anyone can access free transcripts via Yahoo! Finance or from SeekingAlpha.com’s transcripts section and its transcripts RSS feed. According to Jackson, transcripts should be available no later than six hours after the conference calls end.
That certainly held true last night after Apple Inc. (NASDAQ: APPL) released its earnings and held a conference call with analysts that ended just before 6:00pm ET. About three hours later, the transcript was posted to SeekingAlpha.com’s website and highlighted on Apple’s Yahoo! Finance page.
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| Investors had access to Seeking Alpha’s free transcript about three hours after the company’s call ended. |
Interestingly, Apple’s investor relations department does not provide a transcript of its conference calls as a convenience for its investors. And it only provides its earnings calls in its proprietary Quick Time player, which is almost never used on investor relations websites. The most popular standards on IR sites are Windows Media Player and Real Player.
Impact on StreetEvents and CallStreet
The first transcript portal for professionals was started in 2001 by FDfn, which was later acquired by CCBN before being sold again to Thomson Financial, a division of The Thomson Corporation (NYSE:TOC).
According to Thomson Financial, their earnings call and transcript portal, called StreetEvents, “is available only to qualified institutional investment professionals.”
Thomson directs retail investors to a separate website called Earnings.com, which used to go by the paradoxical title of FullDisclosure.com.
At Earnings.com, retail investors can only get audio streams for free. They have to buy transcripts in PDF for $49 a piece.
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| Investors could buy a transcript of Apple’s conference call from Thomson for $49. |
How long that model will last with Seeking Alpha’s latest move is anyone’s guess. Looking at a Compete graph comparing Thomson’s Earnings.com to SeekingAlpha.com, it seems Earnings.com has been poorly attended for quite some time.
The other big transcript service is CallStreet, owned by FactSet Research Systems Inc. (NYSE:FDS). CallStreet also is only sold to institutional investors and corporate clients. Corporations use these services for peer analysis and to keep tabs on what questions analysts are asking on their competitors’ calls.
But with Seeking Alpha saying it plans to boost its free transcript coverage to 3,000 companies and offer “the most powerful transcript search in the industry,” you have to wonder how long before institutional investors and corporate investor relations departments start questioning the value they are getting from StreetEvents and CallStreet.
As Seeking Alpha’s Jackson put it in a recent blog post: “We’re excited to have overturned the status quo.”
A better way to post transcripts on your site
Seeking Alpha’s transcripts also are relevant to corporate investor relations departments in one other respect. A growing (admittedly slowly) number of companies are posting conference call transcripts on their investor relations websites as a service for their investors and to demonstrate transparency.
Companies typically pay Thomson or FactSet a fee to post these transcripts in PDF on their IR websites. Seeking Alpha offers the same service for around $200 per call, but provides HTML rather than PDF. There is no charge if a company simply wants to post a link to the transcripts on Seeking Alpha’s website.
We have been advising our clients to use Seeking Alpha’s transcripts rather than Thomson’s or FactSet’s for the simple reason that HTML is more usable than PDF.
For example, an investor in Germany can use an online translation application to convert an HTML English transcript to German simply by pasting its URL into a tool like Google Translate.
With PDF, however, they have to copy the text and paste it into the translation software, which can be time consuming and often results in a garbled mess of page breaks.
Seeking Alpha’s recent actions are good news for corporate investor relations departments in one more respect. They bring some much-needed competition and innovation to a market that has seen precious little from the lumbering, ever acquisitive giants.
I just hope Seeking Alpha stays independent for a long time.
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