On disclosure…What's the purpose of secrecy? What information to share? I found some interesting articles on this subject that I would like to share.
SCY is operating on two playing fields:
1. SCY and the Copper producer(s): the risks and rewards of sharing information with them
2. SCY and its shareholders: disclosure of preliminary results in negotiations to shareholders (and what this does for these negotiations).
1. SCY and the Copper producer(s) https://www.pon.harvard.edu/daily/negotiation-skills-daily/when-not-to-show-your-hand/ Sensitive or privileged information (like patents)
It can be tough to decide whether to disclose private or sensitive information, such as trade secrets and financial data, as well as your preferences (targets, reservation prices, needs, and interests). This information is often necessary to identify tradeoffs and create value, but there’s also the risk that your counterpart will take advantage of your disclosure.
https://www.pon.harvard.edu/daily/business-negotiations/how-much-should-you-share/ Suppose that two entrepreneurs, a marketing expert and an IT specialist, are thinking about merging their consulting firms to create a greater synergy of services. As their talks unfold, each wonders how much information to disclose. Should they bring up discussions with other potential partners? When should they share proprietary business data? What if one is planning to retire in two years, and the other is starting a family—should they share this personal information? Fearful of being hurt by revealing too much information, most negotiators play their facts and preferences close to the vest. At the other end of the spectrum, the current
negotiation theory advises us to cooperate whenever possible, revealing information to create maximum value.
2. SCY and its shareholders https://core.ac.uk/download/pdf/56357549.pdf Must a publicly-traded company disclose that it is involved in confidential merger negotiations when those negotiations have not yet resulted (and may never result) in a definitive agreement as to the price and structure of the transaction? When, if ever, may a public company engaged in such preliminary negotiations issue a statement falsely denying their existence? If the insiders of a negotiating company purchase the acquiree company's stock-stock sure to increase in value if a nascent merger comes to fruition-without informing the selling shareholders, do the purchasers violate the prohibitions against insider trading? The answers to these questions depend in part on whether preliminary merger negotiations are deemed material within the meaning of Securities and Exchange Commission rule lOb-5. False statements concerning publicly-traded securities, or failures to state information, are actionable under rule lOb-5 only if the misstated or omitted fact is material.
2. Corrections and Updates of Prior Corporate Statements.-
Rule lOb-5 has also been held to create a requirement that publiclytraded companies correct prior public statements that have become inaccurate or misleading. "It is now clear that there is a duty to correct or revise a prior statement which was accurate when made but which has become misleading due to subsequent events.""l l Moreover, the company may also be obligated to correct statements by third parties or even rumors 12 which are attributable to the company. 1
Thus, while the securities laws do not obligate companies to issue public statements concerning merger negotiations, a company that chooses to speak cannot make a materially false or materially misleading statement about ongoing negotiations.