Episode summary
Is This the Last Quarterly Earnings Season? | WSJ's Take On the Week
The Journal
· · Hosts: Miriam Gottfried, Telis Demos · Guests: Marc Steinberg
Summary
Rising Treasury yields and a weakening appetite for new listings set the backdrop for the episode. The hosts said higher yields are pushing up borrowing costs across the economy and may already be doing some of the Fed’s work. They also argued that AI-related IPO delays at OpenAI and Anthropic could reflect both safety concerns and a broader chill in the IPO market, especially after Reuters reported leaks tied to Anthropic’s confidential S-1 and after Aura delayed its listing despite saying demand was strong.
The main interview focused on the SEC’s proposal to let public companies opt out of quarterly 10-Q reporting and file only twice a year. Marc Steinberg argued the change would weaken the U.S. disclosure regime, enlarge the information gap between insiders and investors, and raise the risk of fraud and insider trading. He said the SEC’s own cost-saving rationale is weak, and that if the agency wants more IPOs it should tighten private-market fundraising rules instead of reducing public disclosure.
Steinberg also said the proposal would likely face a legal challenge if adopted, and placed it in a broader deregulatory push that includes efforts to roll back shareholder proposal rights and relax executive-pay voting rules. He warned that less frequent disclosure could push up capital costs and hurt market integrity.
Key takeaways
- The hosts said climbing Treasury yields are increasing borrowing costs and may already be cooling the economy enough to reduce pressure on the Fed.
- The hosts linked delayed IPOs at OpenAI, Anthropic and Aura to both AI safety concerns and a broader IPO-market slowdown.
- Marc Steinberg said quarterly reporting has been central to U.S. securities disclosure since 1970 and that semiannual reporting would widen the “black hole” in timely information.
- Steinberg argued that less frequent reporting would increase insider-trading risk because insiders would have longer windows with material nonpublic information.
- Steinberg said the SEC should tighten private-market fundraising rules, not weaken disclosure, if it wants more companies to go public.
- Steinberg expects a legal challenge if the SEC adopts the rule and said the proposal is part of a broader deregulatory push.
Notable quotes
“the SEC's pending proposal to eliminate quarterly reporting requirements for public companies”
“We could be at 6% for all anybody knows. I'm not That's not a prediction, by the way”
“OpenAI Sam Alman has come out publicly and said that u safety concerns are the reason that they're going to be putting the brakes on their IPO plans until at least next year”
“the SEC is proposing to allow publicly held companies to elect to go to semianual reporting rather than to maintain their current quarterly reporting obligations”
“this will give insiders and others privy to material non-public information greater access and opportunity to engage in this type of illegality”
How the episode opens
Hi everyone, it's Miriam. I'm here today with John Why. He is a columnist at WSJ's Herd on the Street. Thanks for joining me, John. — Thank you for having me.
Now, John is WSJ's resident expert on accounting and financial reporting. He's modest, so he said, "Am I really an expert? But I think he is.
He's here with me today to discuss a topic that I think we both feel hasn't gotten enough attention from investors. the SEC's pending proposal to eliminate quarterly reporting requirements for public companies. Uh that could be happening soon and we're going to have a really interesting conversation about that in a bit with SMU professor Mark Steinberg who is one of the foremost scholars in securities law.
But before we get to that, we have to go back to the thing that has been on the market's mind for a couple weeks now. In fact, it was the subject of our last episode. And that is the fact that US Treasury yields keep on climbing.
They do. And uh this is going to increase borrowing costs for everybody uh for public companies, for private companies, for individuals, uh for mortgage rates. You would think that this would have some type of a tempering effect on the economy and maybe even do some of the Fed's work for it so it doesn't have to raise interest rates uh just yet.
But, you know, nobody really knows where the ceiling is. We could be at 6% for all anybody knows. I'm not That's not a prediction, by the way.
This is just and the yields have really escalated sharply for any number of reasons
And in fact market expectations for a rate hike from the Fed in October have fallen a lot as our colleague Spencer Jacob wrote about in his column this past week — And that is in part because of some of the economic data that came out this week as well as comments by a senior Fed official uh who tempered expectations himself.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- treasury yields
- ai ipo delays
- ai safety
- sec quarterly reporting
- market disclosure
Companies and tickers mentioned
- OpenAI
- Anthropic
- U.S. Securities and Exchange Commission
Watch the episode
Watch “Is This the Last Quarterly Earnings Season? | WSJ's Take On the Week” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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