There is really no question "if" there will be another public relations scandal that taints a publicly-traded company. The only questions really revolve around "when", "how bad" and whether the next bad PR event will create a buying opportunity for shareholders. Like most other kinds of turnaround investing, though, investing in the face of bad PR can be a high-risk/high-reward situation. Accordingly, it is a good idea for investors to do what they can to tilt the odds in their favor.
Assess the Situation Across Four MetricsWhen approaching a stock that looks cheap because the company has made a very public gaffe, there are a few key constituencies to keep in mind. Ultimately the reactions of these groups will go a long way toward separating the wounded-but-will-recover from the permanently maimed.
Impact on CustomersIt probably seems obvious that the first place to check for fallout is among the people the company depends upon for its business - if a company alienates its customer base, and they do not come back, the company is doomed. Likewise, if a brand's cache or premium positioning is tarnished, the company may never again be able to charge similar prices. On the other hand, if customers really just do not care about the problem, it will likely not have any lasting impact.
Click below to read the complete piece:
http://www.investopedia.com/articles/stocks/10/bad-pr-make-investing-opportunity.asp
Showing posts with label corporate turnaround. Show all posts
Showing posts with label corporate turnaround. Show all posts
Friday, October 22, 2010
Tuesday, June 15, 2010
FinancialEdge - Biggest Corporate Comebacks
With Apple (Nasdaq:AAPL) recently supplanting Microsoft (Nasdaq:MSFT) as the most valuable tech company in the world, there is no doubt that it is one of the most remarkable turnarounds in U.S. corporate history. From a foundering company teetering on the edge of irrelevance, Apple has become one of the most innovative consumer-focused technology companies.
Apple is not alone, though. Many other corporations have danced on the brink of collapse and found their way back. Here we take a look at some other well-known major companies that had their flirtations with trouble and came back stronger than ever.
To read the full piece, please click on the link below:
http://financialedge.investopedia.com/financial-edge/0610/Biggest-Corporate-Comebacks.aspx
Apple is not alone, though. Many other corporations have danced on the brink of collapse and found their way back. Here we take a look at some other well-known major companies that had their flirtations with trouble and came back stronger than ever.
To read the full piece, please click on the link below:
http://financialedge.investopedia.com/financial-edge/0610/Biggest-Corporate-Comebacks.aspx
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