What Is An Announcement Date?
An announcement date is most commonly known as the date on which a company announces important details about a decision that has a high impact on business or the company’s shareholders. The announcement date is the first day the public receives any information.
Announcement date can also refer to other types of announcements that may be kept confidential until a specified time. Beyond just company announcements, economic announcements, government announcements, and announcements made by the Federal Reserve can also be released with a specific announcement date.
- Announcement date is most commonly known as the date on which a company announces important details about a high impact decision.
- Announcement dates can also encompass new announcements from government agencies, regulators, or the Federal Reserve.
- Common instances involving an announcement date include: dividend announcements, earnings reports, merger or acquisition activity, new capital issuances, and initial public offerings.
Understanding Announcement Dates
Announcement dates can be very important because they provide a scheduled date for when information is made available to the public. Any information used for financial gain prior to an announcement date can be the subject of an insider trading investigation. Thus, it is essential that big announcements with a substantial impact on a company’s stock price or a substantial impact for a market be held in confidence until fully released.
There can be a wide variety of announcements made by a company. Some announcements may be routine like a dividend announcement or earnings report. Other types of announcements may involve unique corporate actions like a merger or acquisition. Companies also make announcements related to capital such as new debt issuance, new stock issuance, or buybacks. Initial public offerings (IPOs) are another type of announcement that come with a notable announcement date.
In the market there can also be a variety of announcements that can impact the economy as a whole or the financial markets specifically. For instance, the Bureau of Economic Analysis has a scheduled announcement date for the release of gross domestic product statistics that have a big impact on the economy’s growth outlook. Moreover, the Federal Reserve’s Open Market Committee meets regularly throughout the year with an announcement on monetary policy and specifically the target rate for federal funds borrowing, which is an important base rate for fixed income activity comprehensively.
Popular Types of Announcement Dates Explained
Announcement dates for capital issuances, initial public offerings, dividend payments, merger and acquisition (M&A) activity, and earnings reports are discussed in more detail below.
Announcement Date for Capital Issuances
On the announcement date, companies will reveal the type of instrument or security they will be issuing in exchange for new capital to fund the business. Companies may also make an announcement that they plan to go public through an initial public offering.
Prior to the announcement date, the issuer typically works with an investment banking underwriter. The issuer and underwriter have extensive private discussions on the specifications of the issuance, which vary by type. For a bond offering, provisions may include the target coupon, maturity date, and principal being offered. Provisions for IPOs and stock can also be announced. An issuer may choose to appoint a trustee and principal paying agent. Legal documentation and a prospectus will also be prepared prior to an announcement date.
On the announcement date, the company announces its new issuance through a press release, which coincides with a public filing with the Securities and Exchange Commission (SEC). An official announcement and public filing allow a company to market its offering through formal invitations, road shows, and more. After the announcement of a new issuance, a preliminary offering circular is used. Preliminary offering circulars can be amended with the SEC up until the official time of offering.
For one issuance example, consider Company XYZ who announces a $5 million debt issuance of 10-year bonds with a coupon rate of 4.5%. Other features announced include the maturity date, denomination of each bond, payment date, method of offering, interest payment dates, rating, and whether the bond is unsecured or secured by collateral. The proceeds from the issue are to be used for the redemption of the company’s outstanding commercial paper. This announcement provides analysts with new expectations of what the company has planned for operations, as information regarding the reason for fund raising is often included in the announcement.
Announcement Date for Corporate Actions
In the context of corporate actions, an announcement date is the day on which a company announces a corporate event such as a stock split, rights and warrants issue, dividend payment, merger and acquisition, etc. For instance, the announcement date for dividends, also known as the declaration date, is when a company announces the date and amount of the next dividend payment. The ex-dividend date, which is the most important date in dividend investing, is also announced on the declaration date.
For mergers and acquisitions, a company may have several announcement dates relating to the corporate activity. First an announcement is made that the companies involved are considering the action. For public companies, a company must file an informational report with the SEC (usually an 8-K), detailing the terms of the deal being considered. A company’s board of directors and shareholders will need to vote on the deal. If a M&A deal is passed and agreed on by both companies, further documentation must be provided through SEC filings. Once a deal is finalized, the company will provide a target date for regulators and exchanges who will subsequently implement appropriate actions. M&A deals can be lengthy and tedious because of the regulatory approvals involved both domestically and internationally-if a company has multi-national business. Regular updates will typically be provided by the company and its regulators as the deal proceeds to finalization.
Publicly-traded companies are required to file informational reports with the SEC disclosing the details of a new announcement.
Earnings Announcement Date
All publicly-traded companies are required by the SEC to release their earnings on a quarterly basis. The days leading up to an earnings announcement are usually filled with much speculation by investors and market analysts. Analyst estimates can be notoriously off-the-mark and can rapidly adjust up or down in the days leading up to the announcement, artificially inflating the share price alongside speculative trading. On the announcement date, a share price may increase or decrease, depending on how close the actual earnings are to the estimated earnings. Information provided by management on the company’s outlook can also be a factor affecting the company’s market trading price.