RM Online - Do you speak business? If you don't, or if you're a bit rusty, RM can help

Do you speak business?
If you don't, or if you're
a bit rusty, RM can help

The February Rental Management had just mailed when NationsRent announced, on Jan. 21, that it had reached a definitive agreement to merge with Rental Service Corp. Managing Editor Tammy Dawson called me in Las Vegas, where I was covering the World of Concrete show, to tell me the news. We had missed it by only a few days - in the very month we had NationsRent on our cover. Unfortunate, but that's the nature of news; sometimes you're ahead of the curve, sometimes you're not, and you can't lose sleep over things that are beyond your control.

In fact, NationsRent could not have told me about this in advance, anyway: for a publicly held company, it's a matter of disclosure. When companies go public and trade in securities - stock, bonds, debentures, commercial paper, etc. - or when they're in registration for a public offering, they're strictly watched by the Securities and Exchange Com-mission. To jump the gun on a material announcement by divulging a piece of information to anyone (vs. everyone, at the same time) would open a company to a possible charge of inside trading. "Hot tips" like that put a public company in very hot water with the SEC, and that's not a place a public company wants to be. In this case, the RSC and Nations-Rent merger went right up to the wire, and RM was already off the press.

Some definitions: when a company is "in registration" - the so-called "quiet period" or "blackout" - it is at risk of disclosing "material information" that could influence an investor to trade in its stock, so the company clams up. If you're a private person or a private company and you have a bit of information that might encourage someone to buy, you can pipe up and say so; if you're a public company, you can't - you have to wait until you can tell everyone publicly, at the same time. Tell one, or a few, and you open the way to inside trading. It's the law.

Issues like disclosure and materiality are aspects of "the new look of rental," as we headlined our February cover story - realities of an emerging business environment that we will become more and more aware of as the rental industry consolidates and incorporates into public entities.

The ways of big business can be tough to figure out, but Rental Management can help. See page 35 for a primer on reading a public company's announcements - quarterly reports, mergers and public offerings. These things are not usually spellbinding, and people who have not had to be financially oriented often find them mysterious or unintelligible, or perhaps worse: boring. But if you know how to read them and can see what's going on - from what is said and also sometimes from what is not said - they can be pretty interesting.

But entertainment value aside, as rental grows and large rental companies become larger, you will see more and more of this strange language in the press, so it will pay to pick up some basic expressions - enough to get around in this sometimes bewildering new territory.