Public relations can be a frustrating job, and much of that frustration comes from dealing with the media. Journalists have their own agendas and don’t always treat PR people with the respect they deserve. It is important, however, to try to deal with these issues out of the media, not in it. The media likes to attack itself, especially in the post Jayson Blair era, but the media also knows when to protect itself and doesn’t take too kindly to unsophisticated or off-target attacks.
One company that, perhaps unknowingly, has begun to build up a bad reputation in the media due to its attacks on the fifth column is a company I’ll simply call XYZ Corp. I myself was one of the targets of an attack from XYZ Corp., and I’ve since watched the company go after other journalists who don’t simply take what the company says as gospel. “A lot of the stories that appear in the press about [XYZ Corp.] are orchestrated by shorts in conjunction with compliant reporters,” the CEO of XYZ Corp. told The Wall Street Journal.
For those who don’t follow the stock market, “shorts” are investors who bet that a stock will actually go down in value. Like an investor who goes “long” and bets a stock rise, a short can lose a lot of money if the stock does not act as they hope it will. Unfortunately, there have been many instances where shorts will try to use the media – or illegal means – to force a stock to go down. This occurs with long investors as well.
XYZ Corp. is a company in an odd position. It is based far away from financial and media centers yet has grown enormously in the past few years. But there are a lot of people in the investment community who believe the stock is overvalued (or simply want to see the company fail), and it is one of the heaviest shorted stocks out there (i.e., a large percentage of the company’s outstanding shares are held by shorts).
With this backdrop, I’m not surprised that the company is defensive. But there’s a difference between being defensive and making outrageous claims.
The CEO’s comments to The Wall Street Journal are the latest in a series aimed at discrediting media coverage of his company. In 2004, BusinessWeek magazine published a small, front-of-the-book item about XYZ Corp. in which the authors suggested that the company overstated the manufacturer’s suggested retail price on certain products.
In the five-paragraph article about XYZ Corp., BusinessWeek reporters stated the following: 1) They conducted their own research; and, 2) The findings were “in line with the findings of a hedge fund (which declined to be identified) that has shorted XYZ Corp. . .”
The CEO was quoted in the story indirectly as saying there was no intentional deception, blaming any pricing discrepancies on manufacturers changing price lists – and directly as saying, “We bend over backwards to get this right.” His comment and the other information in the story seemed reasonable to me, and I presume to most readers. But that wasn’t going to be enough for the company.
The day the BusinessWeek article was published, XYZ Corp. put out a press release that contained a number of intriguing, defensive statements, and ended it with the CEO stating the following, “I urge reporters to question the intentions of their sources.” This is not exactly the type of comment that fosters good will in the media.
XYZ Corp.’s press release was not just overly defensive and misleading, but also damaging. While the release may have helped repair the company’s stock price temporarily, it was seen by many people in the media as an important “tell” as to what the company’s strategy is: discredit any negative news, then position the company as a target of the misguiding media and a victim of Wall Street.
“These types of comments do not build confidence in the investment community or the media,” one veteran Wall Street analyst, a former journalist, told me. “When you come out swinging at the media when the media hasn’t done anything wrong, it makes you appear more concerned about protecting your stock price than just going about your business.”
The continued suggestion that journalists don’t do their jobs properly – that they don’t understand the motives of sources – is not an intelligent public relations strategy. It would be like saying, “The media is dumb and believes everything people say about us.” And if that’s the case, should the media believe what the company says? The more you suggest the media is wrong, the more eyebrows you raise.
I agree with the CEO’s suggestion that shorts are trying to orchestrate the fall of the company’s stock. Unfortunately, this comes with the territory, and the best way to beat the shorts is by executing the business plan. Financial and business journalists are well-aware of the impact that stories can have on stock prices and generally do a very good job making sure reporting is fair and balanced. Journalists do not need XYZ Corp. – or any company – to remind them how to do their jobs.
This type of behavior will catch up to the company eventually, and when that happens, they’ll have no one to blame but themselves.
This article, written by Ben Silverman, originally appeared in PR Fuel (http://www.ereleases.com/prfuel), a free weekly newsletter from eReleases (http://www.ereleases.com), the online leader in affordable press release distribution. To subscribe to PR Fuel, visit: http://www.ereleases.com/prfuel/subscribe/.