Goldman Sachs is closing its independent research group. There is a very good article here. Worth a read, as it has the history that lead up to where we are today.
“Goldman said, “Hudson Street no longer exists for the simple reason that weak demand from our clients did not warrant continuing the effort.””
[Elliot] Spitzer compared the independent research industry’s current dilemma with that of media companies battling against free news articles on the web. “People want the content, they don’t want to pay for it,” he said in a recent interview with Reuters.”
I would like to think corporate (IR) transparency had SOMETHING to do with this.
Mr. Spitzer’s sound bite should have acknowledged that people will pay if the content delivers value… and that corporate transparency (voluntary or regulatory driven via RegFD, SOX and Dodd-Frank) ALREADY delivers all the content investors require to make their decisions.
If you look at “corporate information” as a product to be marketed, we can assume that independent report providers are not adding enough “product differentiation” to the corporate information the issuers (our clients!) already provide.
Have a great day.