Being process-driven is supposed to lead to an
efficient way of conducting business. But sometimes, too much reliance on
processes, especially when it goes wrong, can lead to irreparable errors, as Google
Inc(NASDAQ:GOOG) found out on Thursday
to its cost.
On Thursday, a glitch in the processes of
R.R.Donnelley, that handles the securities filings of major corporates in the
United States including Google, resulted in the Internet search giant’s
quarterly earnings being mistakenly released ahead of schedule sending its
shares down by more than 10 percent.
Worse, the earnings were not in line with expectations
and in fact were much below what the Street had estimated.
According to various reports the company, lost about
$26 billion off its market capitalisation.
The Street knew a mistake had been made when the
filing with the Securities and Exchange Commission carried a line "pending
Larry Quote" proving that it was a draft document that had been filed.
Google issued a statement blaming Donnelley, which did
not respond to that but told CNBC that it was investigating the
"circumstances of the release."
Shares in Donnelley also fell 5 percent after the news
of the error spread, but it recovered during the day.
According information with SECInfo.com R R Donnelley,
which provides printing services, also acts as a filing agent for a number of
corporates and this year has handled about 75,000 submissions without a hitch.
Filing agents like Donnelley take paper documents and
convert them for submission to the SEC in the appropriate format. The company
also owns the filing portal EDGAR Online.
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