An Interesting Take on Conference Calls

I’ve written here before that if I were running a public company I wouldn’t give quarterly financial guidance, but MicroStrategy (MSTR) is taking the focus on long-term business management even further (see below). Could this be a red flag signaling poor financial results in the future that the company would like to avoid having to talk about? There is no way to know, but I would not jump to such a conclusion without other information to back up that assumption. There is no doubt some investors will see this as a negative and bet against the stock because of it, but with 30% short interest already, that seems like a risky bet to make.

From a MicroStrategy press release issued July 21st:

“MicroStrategy Incorporated (MSTR), a leading worldwide provider of business intelligence software, expects to issue a press release on July 28, 2005, to announce its financial results for the second quarter of 2005.

MicroStrategy has recently reviewed its practice of holding a conference call to discuss its quarterly financial results. The Company believes that it is in the best interests of its shareholders to focus on long-term financial performance, which allows the management team to more effectively run operations and build long-term shareholder value. Accordingly, consistent with our decision at the beginning of this year to discontinue providing revenue or earnings guidance, the Company has also decided that it will no longer hold conference calls following the release of its quarterly financial results.”

Side note: MicroStrategy’s Q1 conference call from April 28th is quite entertaining, and might shed some light as to why that call was the last quarterly call the company hosted. Feel free to draw your own opinions and share them with me, as I think it’s an interesting topic of discussion.

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2 Thoughts on “An Interesting Take on Conference Calls

  1. Krish on July 29, 2005 at 12:01 PM said:

    I love the idea of focusing on long-term results, investing for the future, creating shareholder value, etc. but this move, I believe, may be the wrong way to approach this value-oriented mindset. By not hosting conference calls it seems like almost a cowardly way to avoid Wall-Street pressure. I much rather the company go out and say “screw it, we missed your EPS estimates this quarter but we’re confident that we’re building for a platform for future success. I dare you to downgrade my stock so I can pick up shares in the open market and reap outsized returns over the long-term”. What’s MicroStrategy so afraid of?

  2. Anonymous on July 30, 2005 at 9:51 AM said:

    The call was interesting because the analysts really laid into management, and management showed alot of contempt for the analysts. There was an interesting article about Adelphia, and the reporter said that while the analysts were worrying about the latest subscriber numbers, the company was being systematically looted, and it wasn’t that hard to figure out. If the analysts had more interest in the big picture, they would ask management things like, is SAP going to put you out of business by offering data warehouse software free with an ERP license. Management might actually have something interesting to say about that, instead of worrying about wiggles in the ratio between license and maintenance revenues.

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