by Randy Befumo
Alexandria, VA (July 23, 1997) -- For investors who tuned into 3M's
(NYSE: MMM) conference call replay last quarter, it's tough luck this
quarter. Because 3M was "swamped" by all of 100 calls to listen to the 1-800
replay, the company would not release the number for the conference call
to the Fool this quarter. With access costing roughly $25 per line, we can
see how 3M could be negatively affected by the $2,500 expense. It is, after
all, a rather significant slice of their $418 million in quarter earnings,
When pressed to explain why they viewed too many investors calling in to
listen to the replay as a negative, 3M's Investor Relations department forwarded
the Fool to the Legal department. Under listing requirements for the New
York Stock Exchange, as many long-time Fools know, companies are required
to allow all investors equal access to information regarding material events.
Legal maintains that because 3M will issue another press release or an 8-K
after a conference call, if any "material" information is discussed, they
are in the clear. 3M has issued five 8-Ks in the past three years, most focus
on its spin-off of Imation in 1996.
Now, if all "material" information is in the press release or comes out in
an 8-K or second press release fast enough that individual investors are
still on the same playing field as institutions, why do highly compensated
securities analysts and large institutional shareholders waste their time
on the conference call? For information that is not "material," a small number
of well-placed and very well-capitalized interests seem to care an awful
lot. If press releases and 8-Ks were sufficient, wouldn't they simply use
them just as 3M wants individual investors to do?
It remains our ever so Foolish contention that as legitimate owners of a
small portion of a corporation, individual investors are entitled to the
same access to the same information as any securities analyst or fund employee.
For 3M, the cost to provide its owners with this access is negligible relative
to their bottom line. Although 3M believes that its stance that the information
in the conference call is not material would be defensible in court, they
are hard-pressed to explain why analysts are so eager to listen to the
For shareholders who Foolishly wish that they could participate in the call,
give the company's Investor Relations department a ring at 612-733-1110 and
ask them to explain why a company founded on innovation and originally financed
by an investing public doesn't allow its shareholders access to its business
performance in a complete and timely fashion.
If you do call, please be sure to stress that you are interested in getting
information in the quarterly conference call at the same time as securities
analysts and large shareholders, as you actually own the stock (unlike the
analysts) and will probably continue to own the stock unless they give reason
to believe that it isn't in your best interest -- for example, if they continue
to give the pros an edge over the hundreds of individual investors.