Journalists report news of mergers and acquisitions all the
time. Less common is when a deal is broken by a credit-ratings
firm.
News of Digital Realty Trust Inc.'s $1.89 billion acquisition of
Telx came a day early thanks to Fitch Ratings, which inadvertently
released a detailed analysis on Monday of the deal between data
center rivals that moved Digital Realty's shares.
Fitch's analysis said Digital Realty's treasured
investment-grade credit rating should remain intact, thanks partly
to a decision to finance the deal in part by issuing more
stock.
The ratings firm withdrew the statement, but stock investors
already had what they needed to know. Digital Realty missed out on
Monday's rally and ended 1% lower at $68.42, as shareholders
reacted to the prospect of more stock in the market.
Fitch spokesman Dan Noonan said the problem arose from a
recently upgraded internal system that was designed to stop data
from being published without authorization. Instead, it did the
opposite.
"The primary cause of this incident was a software issue that
has since been repaired," he said.
The glitch was the latest in a string of unintended
announcements of sensitive financial information.
In April, Twitter Inc. published its financial results early on
its investor relations site managed by Nasdaq Global Market.
Selerity, a company that scours the Web for financial data, picked
up the early release quickly and used Twitter's own platform to
broadcast the figures to its followers.
Investors in 2012 got an early peek at Google Inc.'s quarterly
earnings hours before markets closed in New York. Google blamed a
third-party publisher for the inadvertent disclosure.
Ratings firms often hold private talks with companies to vet the
credit implications of a deal before it is announced to the market.
Moody's Investors Service last year retracted a statement about
bonds from Brazil's development bank "due to an internal
administrative error." In 2011, Standard & Poor's Ratings
Services accidentally said it had downgraded France's sovereign
debt. (It hadn't.)
Accidental financial disclosures are becoming more common as
tools for disseminating information proliferate, said Eric Johnson,
Dean of Vanderbilt University's Owen Graduate School of
Management.
"It's truly a problem of our age," he said. "We live in a world
where we're all publishers."
Write to Drew FitzGerald at andrew.fitzgerald@wsj.com
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