CONTACTING COMPANIES FOR INFORMATION

[whiteheron]

I have been thinking about the ethics of contacting companies for information, not to ask leading questions like profit outlook etc but more to get clarification on matters that are not too market sensitive such as clarification of an announcement etc

Most companies provide contacts but I am not too sure what can be asked and responded to and what is "off limits"

A few examples of what others do (if anything) and what is considered ethical or unethical will be appreciated

[whiteheron]

It appears that everyone out there never contacts companies, or if they do they are not prepared to divulge it

Cmon folks, what gives ????????

[Mick100]

I do contact companies occasionally usually to clarify past announcments. There's no point in trying to get inside info because they won't give it to you.

It can still be a useful exercise to contact a company even though your not going to get any info that is not already known in the market

An example (I know you are familiar with LAF WH)
I contacted LAF a couple of months ago with regards to the annoucment that they would commence mining in march. I spoke to company secretary. His responce was pretty much that everything was on track and going to plan. A month later LAF still were not mining and the company secretary had resigned. I didn't hesitate to sell my shares on the announcment of his resignation. I can only speculate as to why he reigned - maybe he got tired of towing the company line knowing very well that they weren't going to be mining any time soon

It's hard to explain the benifits of talking to the company but if you are unclear on something it can be a great help tp talk to them.
,

[whiteheron]

Thanks Mick

I too have contacted companies on infrequent occasions, in the main to get clarification on announcements
I never ask for "insider" information and would not expect to be given it if I did so it seems that we are of a similar opinion in this regard

Regarding LAF, what a pity
It was looking so good initially, but when they were forced to suspend mining and there was a strong anti mining lobby through the catholic church and the investigating body was obviously heavily biased I decided to cut and run
As I initially bought at a low cost I managed to come out slightly on the right side
Could have been better, but could have been worse

In my opinion announcements that are not flagged as "price sensitive" such as changes in directors shareholdings, resignations of senior executives, change in major shareholdings etc can tell you more about what is going on than the "flagged" announcements

[Snoopy]

quote:Originally posted by whiteheron

I have been thinking about the ethics of contacting companies for information, not to ask leading questions like profit outlook etc but more to get clarification on matters that are not too market sensitive such as clarification of an announcement etc

Most companies provide contacts but I am not too sure what can be asked and responded to and what is "off limits"

A few examples of what others do (if anything) and what is considered ethical or unethical will be appreciated

I have requested information through the official company info channels before White Heron. I always do it via e-mail so that I get a written response, and I have never had to wait more than a day or so.

I always keep my enquiry very brief, down to a single question or at most two. Generally I refer to something in the annual report on page XX then explain that I would like a bit more information on that specific point.

On one occasion I was comparing this years Telecom annual report with last years and noted that the breakdown of some infornmation was not as comprehensive this year compared to the previous year. When I queried this, I was given the expanded information that I asked for. The information was already in the public domain, but given out in an analyst briefing (accessible via the net) rather than in the annual report as in previous years.

More recently, earlier this week actually, (Telecom again) I asked for more detailed depreciation rates, after I had again referenced the annual report. In the AR it showed a broad range of depreciation lives for a general category of equipment. I wanted something more specific for some specific equipment and they gave it to me. This was just the fine detail of accounting policy - no 'secrets' so to speak.

Under continuous disclosure rules, a company that is in possession of information that might materially affect the share price *must* disclose that information to the market. If they let something slip to you in a query that would class as a 'leak'. It just wouldn't be on.

I'm not quite sure why you are asking your question here Whiteheron. If the company have an inkling you are trying to get information that has yet to be released to the market they will most probably fob you off.

OTOH If you want to ask a specific clarification of something that was printed just go ahead and e-mail the company. Keep your query short and sweet. If you can't do that, just ask another separate question later. Personally I have found quizzing companies very easy and helpful. Then again the fact that I am already a shareholder may have something to do with it.

I say, just do it .

SNOOPY