Life as a Public Company: The Quarterly Rhythm That Shapes American Business
I'm Andy Temte and welcome to Money Lessons! Join me every Saturday morning for bite-sized lessons that are designed to improve financial literacy around the world. Today is May 30, 2026.
Last week, we walked through what happens when a private company goes public — the underwriting, the road show, the offering price set the night before, and the first day of trading. We ended at the moment regular public trading begins. Today we pick up from there. What does the life of a public company look like?
The lockup period
The first thing a newly public company has to manage is the lockup.
A lockup is a contractual agreement that prevents insiders — founders, employees, and the venture investors who held shares before the IPO — from selling their shares for a set period after the offering, typically 90 to 180 days. The purpose is straightforward. If everyone who held shares before the IPO could sell on day one, the flood of supply would crater the price. The lockup keeps that supply off the market while the new stock finds its footing — which makes lockup expiration day a known event on the market's calendar.
Let's return to Airbnb, our example from last week. The offering priced at $68 a share on December 9, 2020. On the first day of regular trading, the stock closed at $144.71, and the lockup expired about five months later, on May 17, 2021. That day, with the company's earnings report out a few days earlier and insiders free to sell their shares for the first time, the stock fell more than six percent, landing around $132. The market knew the date was coming. Investors had priced some of the impact in. The drop still happened. The lesson is that lockup expiration can be an opportunity for savvy, long term investors to buy on this dip.
The new rhythm of disclosure
Beyond the lockup, a public company lives under a permanent disclosure regime. That regime traces back to the Securities Acts of 1933 and 1934, which we covered in our November 15 episode on the aftermath of the 1929 crash. The SEC enforces those rules today, and they show up most visibly in three specific filings that drive the rhythm of public-company life.
The first is the annual report, known as the 10-K. It runs hundreds of pages and includes audited financial statements, a description of the business, risk factors, and management's discussion of the year. It must be filed within 60 to 90 days of fiscal year end.
The second is the quarterly report, known as the 10-Q. It's shorter than the annual report, the financial statements are unaudited, and it's filed three times a year — the fourth quarter is captured in the 10-K instead. The 10-Q is due within 40 to 45 days of quarter end.
The third is the on-demand filing, known as the 8-K. When something material happens — a CEO departure, a major acquisition, a bankruptcy, or a significant cybersecurity incident — the company must file an 8-K within four business days.
Earnings calls and analyst coverage
The 10-Q is the legal filing. But around each quarterly report sits an event that is just as consequential: the earnings call.
An earnings call is a scheduled phone call, open to the public, in which the CEO and CFO present the quarter's results and take questions from industry analysts. The format is consistent across companies. Management talks first — a review of the quarter, the financial highlights, and sometimes guidance for the quarter ahead. Then the call opens to questions from analysts who follow the company professionally and publish their own forecasts of how the company will perform.
The most closely watched of those forecasts is earnings per share — EPS — which we covered in our April 18 episode. EPS is a company's profit divided by its shares outstanding, and it's the single number Wall Street watches most carefully each quarter. Each analyst covering the company publishes their own EPS forecast for the upcoming quarter, and the average of all those individual forecasts is called the consensus estimate. When a company reports its quarterly earnings, its actual EPS is compared against that consensus. Beating consensus tends to push the stock up. Missing consensus, even by a penny, can push it down sharply.
A penny. Think about that. A company can earn billions of dollars in a quarter, and a one-cent miss against the consensus EPS forecast can erase tens of billions of dollars in market value before lunch.
Short-termism
That brings us to a real cost the reporting cycle and the consensus dynamic together impose on how companies are run.
When management knows the stock will be punished for missing consensus, the temptation is to manage to the quarter rather than to the long term. Cut R&D spending to protect this quarter's earnings. Delay a capital investment that would pay off in five years. Make accounting choices that smooth the numbers. The competitive cost is real — while one company is managing optics, another may be making the investments that capture the next decade of growth.
This isn't a fringe critique. In a June 2018 op-ed in The Wall Street Journal titled "Short-Termism Is Harming the Economy," Warren Buffett and Jamie Dimon — the chairman of Berkshire Hathaway and the chairman and CEO of JPMorgan Chase — argued that quarterly earnings guidance "often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability." Companies, they wrote, often hesitate to spend on technology, hiring, and research and development to meet quarterly forecasts that factors outside their control can throw off. And the pressure has discouraged companies with a longer-term view from going public at all — depriving the broader economy of innovation and opportunity.
Reasonable people disagree about how big this effect is, and the disclosure regime exists for good reason. Investors deserve to know how the companies they own are performing, and the absence of disclosure is what gave us the 1929-era abuses we discussed last November.
Let me share something from my own time in the corporate world. I worked for Kaplan, a Graham Holdings company, for over two decades. CEO Don Graham led that portfolio with a genuinely long-term view — and even so, we felt the pressure of quarterly reporting in our business-unit updates. And it goes wider than that. Corporate budgeting cycles, performance reviews, and bonus structures across American business — at both public and private companies — have conformed to the rhythm public reporting created. The quarterly cycle shapes how corporations operate, even those that aren't bound by the rules.
What management's job becomes
One last shift worth naming. The CEO of a private company runs the company and answers to a small board often dominated by founders and early investors. The CEO of a public company runs the company and continuously narrates it — to analysts, to large shareholders, and to the financial press. The board they answer to also changes in character. Public-company boards must have a majority of independent directors and an independent audit committee, and they bear formal responsibility to all shareholders — hiring the CEO, setting executive pay, and overseeing major decisions. A significant share of senior management's time is spent on quarterly results, investor meetings, board work, and preparing for the next earnings call. That's not a complaint. It's a description of what the job becomes when management is responsible to thousands or millions of public shareholders.
What this means for you
When you buy a single share of a public company, you're buying into all of this — the quarterly cadence, the analyst noise, the temptation toward short-termism. The system can also be turned to your advantage. A long-term investor who isn't trading every quarter can use short-term noise as opportunity. A stock punished for a one-cent miss is often a better bargain a week later than it was a week before.
Don't confuse quarterly noise with long-term signal. The quarter is a snapshot; the longer arc is where the real story plays out.
Next week, we'll move from owning shares to a different mechanic entirely — selling shares you don't own. We'll talk about short selling: how it works, why it exists, and why it can go very wrong very fast.
Until next week... Grace. Dignity. Compassion.
