During a conference call to discuss second-quarter results at Sears, Roebuck & Co., CEO Alan Lacy was prepared for a barrage of questions from analysts about why the company missed earnings expectations. What he was not prepared for was a question from an irate customer who had a bad experience with a washer delivery.
The customer posed as an analyst from Credit Suisse First Boston. "Alan, I purchased a washer and dryer from one of your Texas stores," he broke in. The customer went on to describe a faulty installation and damage that was done during a delivery, and demanded to know what the CEO was going to do about it.
Sears spokesperson Chris Brathwaite says only that the company has a screening process during conference calls and that it was an isolated incident. But as conference calls become more open to the public, companies are increasingly concerned that they could be disrupted by callers who aren't who they say they are, or have questions that aren't related to the discussion. "It is one of the reasons companies didn't want to open up the calls to the public after Regulation FD was passed," says Richard Frankel, an associate professor at the MIT Sloan School of Management.
Most firms broadcast the calls over the Internet and continue to keep the ability to ask questions open only to analysts. "Reg FD does not require that the public be able to ask questions," says Frankel.
A more common problem, says Louis Thompson, president and CEO of the National Investor Relations Institute, is when short-sellers get on a call and bad-mouth the company in an attempt to deflate its stock price. He says companies need to distinguish callers with their own agenda from those with legitimate, hard-hitting questions. "You shouldn't retaliate by cutting them off," says Thompson. "But if it's harassment, that's a different story."
As for the unhappy Sears customer, "the issue was resolved to his satisfaction," says Brathwaite.