Hoax Analyst Showing Up On Earnings Calls

from the six-sigma-indeed dept

I don't follow the process behind earnings conference calls too closely, but apparently there's an element of trust involved. People dial in, tell a moderator who they are, and a bunch of analysts from the most well-known firms are allowed to ask questions. That system is ripe for gaming, and apparently, some unknown guy has been doing exactly that over the past few months, calling into earnings calls and getting to ask questions by pretending to be someone else. No one seems entirely sure what game the guy is playing -- but it doesn't appear to be an attempt to hoax the overall system or be a practical joker -- as his questions aren't amusing. He just brings up odd questions about operations: supply chain initiatives, lean manufacturing, six sigma, etc. That has some believing that he's really working for some consulting firm, either trying to dig up dirt on other company's operations, or even trying to kick up more interest in supply chain work. Either way, it's fairly amazing to find out how the conference call system works and how easy it is to game. It's surprising that this hasn't been done more frequently, honestly. In response, some firms are now handing out special codes to analysts to let them ask questions in future conference calls, rather than just relying on who people say they are -- though, of course, that brings up a different issue: what's wrong with letting people other than your preferred analysts ask questions?


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    sonofdot, Feb 18th, 2008 @ 7:24pm

    what's wrong with letting people other than your preferred analysts ask questions?

    Nothing's wrong with it, provided those asking the questions properly identify themselves, rather than masquerading as others.

     

    reply to this | link to this | view in thread ]

  2.  
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    secret, Feb 18th, 2008 @ 8:13pm

    A lot of calls have different lines for different types of listeners/participants. That's why you'll find the webcast link on every public company's site, but only certain ones will have a phone number. Lots of companies limit the pool of questioners by only supplying certain groups with that number...

     

    reply to this | link to this | view in thread ]

  3.  
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    Ben (profile), Feb 18th, 2008 @ 8:23pm

    Re: nothings wrong if...properly ID themselves

    Yeah but...
    These companies are NOT allowing anyone else to ask questions, SO the ONLY way to get a fair chance, which we both agree everyone should have, is to lie. In other words. They are acting immorally. In a perfect world, a policeman would come along and arrest them, BUT there is *no one* to arrest them, therefore - LIE TO THE BASTARDS, and you are doing the right thing.

     

    reply to this | link to this | view in thread ]

  4.  
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    Shohat, Feb 18th, 2008 @ 11:57pm

    Like a politician talking about Net Neutrality

    Hello Mike
    If you ever heard a politician speak about Net Neutrality, you must have had that
    "He just discovered this complex issue 30 minutes ago, WTF is he doing there talking about things he barely understands"
    feeling.
    You know, when someone takes on a complex issue, with a long history of swings and problematic players, and decides to go "well, fuck them all, I figured it all out, here are my 2 cents !".

    This is pretty much your "series of tubes" right there.

     

    reply to this | link to this | view in thread ]

  5.  
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    Mike (profile), Feb 19th, 2008 @ 1:52am

    Re: Like a politician talking about Net Neutrality

    This is pretty much your "series of tubes" right there.

    If you think I said something wrong, then don't just call me dumb. At least explain what I got wrong, so I can respond.

    I'm not sure what good it does to just call me ignorant without backing it up.

     

    reply to this | link to this | view in thread ]

  6.  
    identicon
    Shohat, Feb 19th, 2008 @ 2:55am

    Re: Re: Like a politician talking about Net Neutra

    Alrighty.
    1) Let's do this backwards.
    "

    Either way, it's fairly amazing to find out how the conference call system works and how easy it is to game
    "

    Please state an example of gaming it.

    2)that brings up a different issue: what's wrong with letting people other than your preferred analysts ask questions?
    There isn't much wrong, and for most companies that hold earing calls, it's reality. Moreover, 80% of the time, you can easily get professional, detailed answers without even having to attend these calls.
    Just try it - contact Investor Relations of a decent company
    (http://investor.google.com/ ?), say
    "Hello, dis iz Mike, I has Blog, w/450k uniques and 1mil PV/ month. Do you see icanhascheezburger.com as a threat to Google's business model, and would you consider the Poison Pill in case of a takeover?"

    And you are not exactly dumb, just... strangely off. Like trying to get an orgy going in someones Bar mitzvah.

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    Anonymous Coward, Feb 19th, 2008 @ 4:32am

    Re: Re: Re: Like a politician talking about Net Ne


    Alrighty.
    1) Let's do this backwards.
    "

    Either way, it's fairly amazing to find out how the conference call system works and how easy it is to game
    "

    Please state an example of gaming it.


    I'd say that the article gives a VERY good example of gaming it. Can you explain why you think this isn't a good example?

     

    reply to this | link to this | view in thread ]

  8.  
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    JustMatt, Feb 19th, 2008 @ 4:39am

    Back on the Bar Mitzvah thing...

    I was not aware this feature existed in your product. I would like to subscribe to your newsletter.

    Back on topic I will point out that earnings calls have a finite block of time, and bogus person x is taking time away from legitimate participants, reducing the flow of information necessary to determine the financial health and prospects of said company, thereby harming investors. Since I assume he is reading this blog this morning I'll add a secret hidden note for him: L00ser!!

     

    reply to this | link to this | view in thread ]

  9.  
    identicon
    Ferin, Feb 19th, 2008 @ 5:03am

    Not relevant but...

    Argh! Fucking six sigma! Our company uses that crap. I really loathe it. "If we measure shit enough and requrie more documentation, surely things will improve." Argh!

     

    reply to this | link to this | view in thread ]

  10.  
    identicon
    Rachel, Feb 22nd, 2008 @ 6:36am

    Conference Calls

    I'm just wondering how this guy is getting into these calls in the first place. I am actually work for a conference provider and I am a conference operator. Yes, I'm the person who opens the call and turns it over to the chairperson, conducts Q&A's, etc. And it's not like just anyone can call in and join any call. It is more complex than that... at least with our company. Not sure about other providers. But each client hosting a conference call is provided with their own dial-in number (which means we have thousands of telephone numbers) and they are also provided with their own conference ID number. The dial-in numbers and conference ID numbers are then emailed to participants. So it's not like just anyone can call in and request to be joined to any conference... you have to get the dial-in number first, you have to know the conf ID #. Also, if it is a high-priority call, the client can always set up a password to reference in order to join the conference, or they could send us a list of participants who are allowed into the call. And if someone calls in who is not on the list, they are turned away. That is the best way to ensure that everyone in the call is legit. But anyway, our company sent out a memo yesterday informing us of the situation and what to do if it happens to us. So I'm not sure how other conference providers work in terms of security, there are precautions that everyone can take - the client and the conferencing provider - to prevent situations/hoaxes like this from happening.

     

    reply to this | link to this | view in thread ]


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