April 10, 2020

“Live From My Living Room!” Stay-at-Home Orders No Match for Legal Webcasters

Have you ever watched a community access cable show? “Wayne’s World” will always be the definitive parody of these programs, but some of them are very creative. For instance, my local community access channel used to air something called “The Half Hour Show,” which involved two guys sitting in lawn chairs parked at a different local spot each week. The camera was placed behind them, so you never saw their faces. They just sat in their lawn chairs and watched the world go by for 30 minutes without saying a word. It was a post-modern masterpiece – and people loved it!

Another one of my community access favorites was a program in which some guy pointed a camera at his TV and showed a Madden video game simulation of the upcoming week’s Cleveland Browns game. I liked that show because unlike in real life, the Browns sometimes won.

Shows like these demonstrate that you don’t need a big budget or slick production values to provide quality programming – and it turns out that some of our fellow home-bound colleagues have taken that message to heart. In fact, we’ve heard from a couple of firms whose lawyers who are hosting educational video webcasts from their homes.

As you might expect, these webcasts focus on the corporate & securities law issues raised by the Covid-19 crisis, and offer a user-friendly alternative to the avalanche of client memos on these topics that everyone’s been receiving. Here’s a series of informative Covid-19 FAQ videos straight from the home offices of Perkins Coie’s Jason Day & his colleagues, and here’s the first in a series of Covid-19 videocasts from Fenwick & West’s corporate group. Technically, Fenwick’s videos originate from its “public tech company virtual situation room” – but it looks a lot like the living rooms of members of the corporate group.

Both sets of videos are well worth checking out, although I do think they could use some lawn chairs.

Covid-19 Crisis Disclosure: What About Earnings Guidance?

One of the many issues that companies are grappling with as a result of the Covid-19 crisis is what to do about earnings guidance. This Bass Berry blog addresses that issue, along with other high-level considerations for first quarter earnings releases.  Here’s an excerpt:

For companies that previously issued 2020 guidance which remains in place, a gating issue is the extent to which the registrant believes that it can continue to project (with a reasonable basis) its 2020 forecasted results, taking into account the COVID-19 pandemic (which pandemic itself has a broad range of best-case and worse-case reasonable scenarios from a public health and economic perspective).

The issue of whether a registrant has a reasonable basis to potentially continue guidance will differ by industry, with companies in certain industries whose business (at least in the short term) has been so fundamentally harmed by the COVID-19 pandemic likely concluding that there is no practical ability to continue to provide guidance until there is greater macroeconomic certainty, while companies in other industries may have a closer judgment call.

Overall, we expect that a significant number of registrants, across a wide range of industries, will elect to withdraw guidance based on a determination that the uncertainties associated with COVID-19 are so significant that it is not practicable and/or advisable to continue to provide guidance.

The blog says that the negative market reaction typically associated with withdrawing guidance “may be more muted” in the current release cycle, if for no other reason than so many companies are likely to do it. The blog also suggests that companies opting to continue to provide guidance provide a broader range due to the uncertainties associated with the outcome of the crisis, and accompany that guidance with extensive caveats and detailed disclosure of assumptions about how the Covid-19 crisis will play out.

Risk Factors: Tips on Covid-19 Updating

If you’re preparing your first Covid-19 crisis SEC filing, I recommend that you take a peek at this WilmerHale memo on updating risk factor disclosure to address the pandemic. It’s short, specific and practical.

John Jenkins