To the defense of Apple

A couple nights ago, the Wall Street Journal published a report claiming that Apple has significantly decreased component orders due to weaker-than-expected demand for the iPhone 5. Apple bloggers John Gruber and Jim Dalrymple quickly came to Apple’s defense and claimed that the WSJ report was merely stock manipulation. Gruber had six posts on the story yesterday alone, including a link to Jim’s post titled “Apple can’t respond to rumors of iPhone 5 cuts even if it wanted to,” which states:

I’ve been asked a lot today why Apple hasn’t responded to the Wall Street Journal article saying that there have been massive cuts to iPhone 5 orders. The simple fact is, they can’t.

SEC rules prohibit Apple from talking publicly about the company. This is known as a quiet period and all publicly traded companies must adhere to these rules.

It doesn’t seem as though this is correct. First, the quiet period is associated with registration statements (“a quiet period extends from the time a company files a registration statement with the SEC until SEC staff declare the registration statement “effective.”), which are filed before a public offering, not before earnings reports. Second, Jim’s article doesn’t explain why Apple, and other companies, routinely announce product sales figures. Of course, these announcements are usually only made when it’s good news. But good news can affect the price of a stock just as much as bad news. Third, this article from CNET directly contradicts Jim’s post:

There is no law to break. The SEC does not require any quiet period before a quarterly report.

For years, publicly traded companies have been citing rules from the U.S. Securities and Exchange Commission as reasons not to discuss almost anything related to corporate operations in the weeks preceding a quarterly report. “SEC-mandated quiet period” often becomes a boilerplate phrase for public-relations personnel when earnings are less than a month away.

Yet it’s not even an SEC rule.

Granted, the CNET article is from 2001, but I’ve yet to find anything contrary. It looks like Jim and John have erroneously passed along a misstated corporate excuse as established fact.