When it Bleeds, it Leads

When I started at The Wall Street Journal Online in the 1990s as a wet-behind-the-ears news assistant, I can still recall one of my editors making a crack in the newsroom about “when it bleeds, it leads.” The market had experienced a steep sell off that day and my editor was in the throes of putting a headline on a story about the blood bath stocks had taken.

The recent market volatility harkens back to the all-consuming frenzy that permeated the newsroom when the Dow dropped in a big way, and it got me thinking: Are financial journalists partial to writing stories about negative news, and if so, does that provoke even more irrational fear in the market?

To gain some insight on what people think, I decided to engage Twitter’s polling option, which is free if you tweet the poll to followers.  I wanted to drum up more than five votes, so I paid Twitter to promote the poll.  Following are the results:

 

Even though the question elicited 295 votes, the results were not very conclusive.  Nearly a third of respondents believe that media are more inclined to publish stories about a bear market, and the same goes for a bull market.  At the same time, 44 percent of voters claimed media are indifferent about publishing bull or bear market news, which is where I take issue.  Call me a curmudgeon, but I do believe that media are more inclined to publish negative news, after all who wants to read about positive news unless puppies are involved?

The German word schadenfreude comes to mind, which means to take pleasure in someone else’s misery.  A lot of folks have made a lot of money in the stock market during the last several years, and quite frankly, this recent correction may be validating for all of those other folks who haven’t been able to generate solid returns.   Getting your comeuppance on Wall Street is a sexy story to tell these days, with the hit movie “The Big Short” drawing hordes of crowds, not to mention Martin Shkreli’s rise to fame as the hedge-fund-turned-pharma-exec devil incarnate.

I fully support holding fraudulent companies, executives and anyone else in the capital markets accountable, although finding that balance can certainly be difficult when journalists’ salaries are miniscule relative to what folks make on Wall Street. Perhaps the only way to ensure that financial media are less biased toward writing bludgeoning stories is to get their salaries more in line with the people they cover.  And who knows, that might help ameliorate market volatility and put more money in the hands of everyone.

– Evan Pondel, epondel@pondel.com  

What Does it Take?

Over the past several months, I’ve given a lot of thought to what it takes to be a good investor relations practitioner. After more than two decades of helping companies through the trials and tribulations of being public, I’m not that surprised that many of the following characteristics or traits that are important cannot be learned from books, on websites or through advanced degrees.

  • Knowledge: Strong working knowledge of financial statements/rules and regulations/capital markets. This one is a no-brainer. It’s hard to do the basics of investor relations without the requisite comprehension of what it means to be a public company.
  • Analysis: Always be ready to review a situation, operating peer or balance sheet with a sharp and analytical mind. Data is readily available, but proper analysis of that data is priceless.
  • Juggling: I don’t mean apples, balls or in the case of a former client, coconuts, but instead deftly managing deadlines, priorities and multiple personalities (hopefully from multiple people, not just one). If you work at an agency, extra points for having to do the above for many clients at one time.
  • Patience: When your stock is dropping, the phones are ringing off the hook and your email is pinging every 30 seconds, it’s important to remain calm when talking to investors and working with management to solve the problem du jour. Everyone has their own ideas, solutions and timelines, so being able to take in all of the information necessary to make the best decision with poise, is key.
  • Brevity: Executives and investors are busy. Say what you need to say quickly and precisely. Get to the point, and get out. This holds true whether your communication is written or verbal.
  • Strong Shoulder: There will be many times throughout your career when a colleague, client or senior executive needs a sounding board and someone to lean on. CEOs are people, too, so when a company is facing challenging times, or a solution is hard to come by, just being available to listen is immensely helpful. I have spent many afternoons as therapist versus press release writer, but those are the times I realize that I am truly part of the team.
  • Sense of Humor: When all else fails, laugh. It’s contagious. Almost nothing is insurmountable, so a little lightheartedness helps everyone reset and refocus. Investor relations is not an easy profession, so have fun with it.We’d love to hear what other traits are important. Let us know in the comments section.

– Laurie Berman, lberman@pondel.com

Hello 2016

We’re excited to usher in 2016 and looking forward to keeping you informed on this blog about all things relevant to investor relations, strategic public relations and Julia Child’s secret recipes.  Now that your ears are perked, following are a couple of interesting tidbits from PondelWilkinson.

  • Evan Pondel recently wrote the cover story for IRupdate magazine on how to think like an activist.   He interviewed Chris Kiper, founder of activist firm Legion Partners, for a rare look at his playbook.  Check out the story on page six of the issue.
  • PondelWilkinson volunteered a couple of weeks ago at Working Dreams’ Holiday Toy Event, where PW helped foster children select presents that were donated to the organization.  Following is a picture of the team.Working Dreams
  • And last but certainly not least, Roger Pondel wrote the following New Year’s resolution on transparency.

2016 Resolution: Don’t Forget the Transparency

At the risk saying, “We told you so,” 2015 proved to be a year when companies that failed to heed our mantra, Transparency Adds Value, took it on the chin.

Whether privately owned or publicly traded, in times of crisis or when all is going well, transparency always pays off…period. And the lack thereof, almost always backfires bigtime.

Probably the year’s biggest lack-of-transparency story was Volkswagen’s emission-cheating scandal that actually began more than 10 years ago, long before the news broke. I guess it’s hard to keep those kinds of secrets forever. Want to buy a VW today? How ‘bout an Audi?

In our business, people sometimes have the misimpression that it’s all about spin. (I hate that word, except when it’s part of an exercise class and done to a Latin jazz beat.)

No, it’s not about spin. It’s about journalistic fact finding, developing a communications and messaging strategy, perhaps biting some bullets a la corporate castor oil style…then telling the truth to mitigate the damage and maintain reputation.

And it’s not all about crises. Just look at what happened in 2015 to the valuations of many once-considered-hot, pre-public tech companies that lost billions in combined valuation because of lack of transparency.

Lack of transparency hurts customers, employees and investors alike. And while no one is happy to hear less than stellar corporate news, the market rewards transparency. Companies that do not practice it would do well to heed our mantra in 2016 and beyond.

Here’s to a transparent 2016 that brings peace and prosperity to all!