reporting and interpretation. Instead, it serves to mitigate and proscribe bad news, helping to guard against anything that might deflate the thick bubble of faith on which the markets rest. Founded in 1954, PRNewswire, the nation's largest disseminator of corporate press releases, has two circuits to serve its 15,000 clients. One circuit reaches approximately 2,000 newsrooms across the country simultaneously. The other, which began operating in 1965, is on a fifteen minute delay, reaching over 100,000 terminals in investment banks and money management firms. The readers on the second circuit include traders, brokers, money managers, mutual and pension funds, insurance companies, and the countless pseudo-professionals on the periphery of the markets. (Investors fall for the press release illusion too, treating releases much like the media. But investors are to be excused for their optimistic bias: they are, after all, interested parties.) PRNewswire's clients, mostly companies, pay a $100 membership fee and then $450 to send a 400 word release ($110 for each additional 100 words) over the main national circuit. In the early 1960s-when companies were still giving their releases to messengers-David Steinberg, now the vice-chairman of PRNewswire, had a vision of press release wires that could serve as the conduit for legally-required disclosures. Under no illusions, he sees PRNewswire as "an extension of the corporation." But the media believes that itis PRNewswire's master. As soon as a press release comes over a wire, an editor-usually whose exclusive job it is to watch the wirereads the entire release carefully trying to gauge its "news value." If it is deemed newsworthy, the editor sends a headline out on the wire (readers would see it scroll up their computer screens) and assigns the release to be re-written. A reporter then takes the release, pares it down to three or four one-sentence paragraphs, rearranges it to bring the important news into the lead, and sends it out to readers. Today, it is possible for the public to read a release only houts later through a database such as Nexis. But most people see only rewrites of releases through newspapers. Each timeworn method' corporations have to hide their news and each individual press release shelling the market at three-a-minute exist in preparation for the inevitable moment a company must release "bad" news. News that disappoints The Street sends the stock price and the value of the company tumbling. To find news, the editors have to wade through a vast blather ofcyber-noise: wholly inconsequential, inane press releases, many of which are merely de-glossed attempts at free advertisement, like this announcement by Alexin Pharmaceutical Corp. Its first line read: "The Board of Directors and Shareholders ofAlexin Pharmaceutical Corporation today announced plans to change its company name to Lexin Pharmaceutical Corporation." The release went on to quote Dr. Jerry B. Hook, president and chief executive officer, babbling: "The name change supports our exciting and aggressive development strategy and will enhance our growth worldwide."
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BAFFLER