OLD Media Moves

Don't forget to mention stock price reaction

December 23, 2006

Marek Fuchs of TheStreet.com noted that few business journalists wrote about how Pfizer’s stock price performed during the tenure of the ex-CEO after his big payday was disclosed.

Marek FuchsFuchs wrote, “Too often in the case of daily breaking news, the immediate reaction of the stock market is mentioned prominently. This is even the case, as I’ve pointed out with my nostrils in full flare, when the news breaks after the close. This means that the knee-jerk reaction of a few traders operating in the thin volume world of after-market trading gets solidified into conventional wisdom.

“The news came out. A few after-market mongrels liked it. Therefore the news is positive.

“In the case of Pfizer’s former chief blunderer Hank (Money in the Bank) McKinnell, few business journalists made appropriate mention of his payout vs. the stock’s performance. Sure, plenty of articles buried the stock’s performance under his leadership — and that might be too kind a word for the ditch-driving that he did — way down at the bottom of the article, after leading with the size of his bounty. That, however, does not define the issue, and this is an issue that above almost all others needs to be defined, for the safety and sanity of investors.

“The Financial Times did a good job. Look at this lead: ‘Hank McKinnell, who was replaced as chief executive of Pfizer earlier this year, will walk away with potentially more than $200m in compensation when he officially leaves the US drugmaker in February. This comes despite an almost 40 percent fall in Pfizer’s share price since Mr. McKinnell became chief executive in 2001.’
That second sentence of information was in the third sentence from the bottom, an afterthought, in an Associated Press article.

“The Wall Street Journal, for its unhelpful part, ran the information four sentences from the bottom.” .

Read more here.

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