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PR Fuel: Shooting the Messenger in the FootBeing a third party can be a pain sometimes.Earlier this year I helped a journalist on a story about a company that shall remain nameless. I helped the journalist analyze some data and provided him with my perspective on what the data meant. I've done this hundreds of times over the past few years and this particular time was no different than any other - that is, until the story was published. The article in question turned out to be highly negative. I was quoted speaking negatively about the company, as were two other people who have no direct affiliation with the company. The information we all relied on was publicly available, filed with securities regulators by the company itself. The day after the article was published I received a rather strange voicemail message from a public relations person at the company. "We disagree with your assertions and believe you based your statements on erroneous information. We hope that you will contact [the reporter] and ask him to publish a retraction," the public relations person said. I scratched my head listening to the message, wondering what information was "erroneous." I went back and checked the documents on which I based my comments. I did not see anything wrong with them. And, again, the information was provided by the company itself to the Securities and Exchange Commission, so it was ultimately the company's responsibility to ensure that what it put on file was accurate. Before I called the public relations person back, I decided to drop the reporter an email and ask him if the company had responded to his piece. He had spoken to the public relations person before the article was published and got a typical "no comment." After the article hit, however, he said he received a call asking for retraction. "[The company] is claiming that the information I based the article on is inaccurate," the reported told me. "That would be fine if the information didn't come straight from them. I'm waiting to hear back as to exactly what information is inaccurate." Still scratching my head, I gave the PR person a call. "Can you tell me what information was erroneous?" I asked. "Everything you based your comments on was inaccurate," the PR person said. "We're in the process of putting together amended filings that will correct the errors." It turns out that the company had made some errors when filing documents with the SEC. The errors were rather glaring and unusual in their scope. I've seen worse errors made, but the filings were publicly available for more than a week and it wasn't until someone in the media wrote about the disclosures made in the documents that the company actually caught the errors. Considering the company had made the error, failed to correct the problem in a timely fashion, and then decided not to comment to the media, I asked the PR person what she thought I should do. "Well, your comments make no sense now," she told me. "You're on the record talking about information that is inaccurate. You're making statements based on false information. Don't you think you should retract your comments?" I understood the PR person's argument, but there wasn't much I could do about it. I'm just a third-party analyst and I can't control whether or not a media outlet publishes a retraction. If the publication did publish a retraction, the entire story - including my comments - would be rendered moot. This would solve the problem. "When you file the amended documents, if a new story is written on the subject, I'm more than happy to reexamine the situation," I told the PR person. "Otherwise, it's out of my hands." The PR person did not like this response, and she gave me an earful about my obligation to speak truthfully. At one point, I literally thought she was foaming at the mouth. Finally, I had had enough. "Listen," I said. "You guys made the error and didn't bother to fix it for more than a week. You had the opportunity to speak to the media and you decided not to. You controlled the central pieces of information in the story and you controlled them improperly. How is that my fault?" With that, our conversation ended. A few days later, the reporter who wrote the original story called me. The amended documents had been filed and, indeed, all of the information that the article had been based on looked very different than what was originally on file. Armed with the correct information, I was asked for comment for a new story. "No comment," I told the reporter, relaying to him my conversation with the PR person. The reporter let out a chuckle and explained that the other two analysts quoted in his original piece had similar conversations with the PR person. The other analysts decided not to comment either, though one said it was because the amended documents basically wiped out what would have been a newsworthy story. I agreed with that sentiment and suggested that this was now a non-story. Good reporters don't like non-stories, mostly because they have to figure out how to explain to their editors that they no longer have anything to write about. This particular reporter is a good one and after speaking with me he came up with a new angle for his story. After he told me this new angle, I was more than happy to provide him with a comment. "Company's Error-Filled Filings Cause PR, Investor Headaches" read the new headline.
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