[Date Prev] [Date Next] [Thread Prev] [Thread Next] Indexes: Main | Date | Thread | Author

[ba-unrev-talk] A sign of the times?

Forwarded to me by a friend...    (01)

Seattle Shipper Responds to Street
By Putting 'Dis' in Full Disclosure    (02)

Staff Reporter of THE WALL STREET JOURNAL    (03)

Most public companies go out of their way to please Wall Street analysts. 
Then there's Expeditors International of Washington Inc.    (04)

In one of its periodic regulatory filings, which usually include responses 
to Wall Street queries, the freight forwarder issued this riposte to an 
analyst's suggestion that it hire an investment banker: "We decline to 
learn about fairness from anybody who has worn braces within the last five 
years."    (05)

In another filing, the company sniped: "Is it just us, or are the rest of 
you also getting tired of this?"    (06)

In still another, Expeditors sneered that a certain analyst's mathematical 
argument "strikes us as a totally meaningless observation. We advise most 
people to stop reading right here."    (07)

A Good Read    (08)

But Wall Streeters can't stop reading. The reports have gained a small but 
enthusiastic cult following, especially among investors in Expeditors. 
Money managers e-mail snippets of the filings to colleagues. One research 
assistant at a large brokerage firm, who pleads that he would be fired if 
he were named, calls the filings "the best bathroom reads of all time."
[[Analyzing the Analysts]] ? See complete coverage of the heightened 
scrutiny of analysts, including key e-mails among Merrill employees and 
their contexts.    (09)

? Join a roundtable discussion with a panel of experts.    (010)

Expeditors' verbal volleys strike a chord at a time when the integrity of 
analysts and corporate officers alike is under attack. "You've got to love 
their attitude," says Helane Becker, an analyst at the small firm 
Buckingham Research Group. Chuck McQuaid, co-manager of the $6 billion 
Liberty Acorn Fund, which has owned Expeditors stock for more than a 
decade, calls the reports "irreverent and funny."    (011)

Not everyone on Wall Street sees it that way. "Quite frankly, Wall Street 
made them rich," says Arthur W. Hatfield, an analyst at Morgan Keegan & Co. 
in Memphis. "They should back off."    (012)

Fortunately for the targets of its derision, Expeditors doesn't mention 
analysts by name. Alexander V. Brand, an analyst at BB&T Capital Markets in 
Richmond, Va., says he finds some comfort in the anonymity. "Nobody outside 
of the person who works with me knows I was insulted," he says.    (013)

Expeditors gets away with dishing out abuse to Wall Street because it 
doesn't really need its services. The company, which buys freight space in 
ships and airplanes and then resells it to customers at a profit, hasn't 
raised money from Wall Street since it went public in 1984. Its stock price 
has far outstripped the Standard & Poor's 500 Index in the past five years. 
Net income has risen every year since 1993, and the company has no plans to 
raise money from investors in the foreseeable future.    (014)

No Conference Calls    (015)

Unlike most companies, Expeditors doesn't conduct a quarterly conference 
call, that staple of Wall Street communication where analysts get to ask 
top executives questions after a company reports its earnings. As an April 
filing by Expeditors put it: "We don't do conference calls, and we never 
follow children or animal acts."    (016)

Instead, Expeditors publishes its comments around the middle of each month 
in a regulatory filing known as a "Form 8-K Current Report." These filings 
are used by companies to report important news that occurs between 
quarterly earnings reports. The 8-K filings are made to the Securities and 
Exchange Commission and are normally bare-bones communications of a sale of 
assets, the resignation of a director or a change in auditors. They often 
consist of only a one-page news release.    (017)

Expeditors began filing its enhanced 8-Ks, which are are available through 
Expeditor's own Web site (www.expd.com) as well as Web sites that compile 
SEC filings, about a year and a half ago to comply with new SEC rules on 
fair disclosure. These rules generally forbid material news from being 
selectively disclosed to a favored few analysts. The first few editions 
were fairly tame, but over time, the executives found their voice.
[[Portrait of Peter Rose]]    (018)

"Brokers in New York want to call the dweeb in Seattle and show they know 
how things work," says Chairman and Chief Executive Peter J. Rose, 59 years 
old. Once a month, Mr. Rose meets with his chief financial officer, Jordan 
Gates, and general counsel, Jeffrey King, to compose their responses, often 
gathering in Mr. Gates's office overlooking Seattle's Elliott Bay.    (019)

Mr. Rose, who co-founded Expeditors in 1981 after spending years working in 
the freight industry, makes no bones about his dislike for Wall Street. The 
current message on his answering machine at work says: "Hi, this is Pete 
Rose ... If you're a customer, employee or a friend, I'll get back to you 
as soon as I can. If you're a stockbroker, consultant or selling the latest 
scam, there's a good chance you won't be hearing from me. Thanks for calling."    (020)

In an 8-K filing last October, the company apologized for having made its 
e-mail and Web site temporarily unavailable to outsiders. Mr. Rose 
explained in the filing that, to shut off unsolicited pornographic e-mails, 
the company accidentally shut off all e-mail.    (021)

"In the process of filtering out the pornographers, we also filtered out 
the investment bankers," the filing stated. "We can assure you that this 
was inadvertent."    (022)