Is PR dead? There’s no better way to tell than looking at the aftermath of a major PR fail.
When really bad news is made public, it not only affects people’s opinions, but it also affects the stock market.
Remember what happened when Steve Jobs denied he was ill, then took a leave of absence to have a liver transplant? Apple’s stock nose-dived 7 points that day.
Here are several other major public events, compared to the company’s stock prices for that month.
Note: this list does not include companies that went bankrupt (i.e. Enron). Stock dip percentages were calculated based on the price immediately before the crisis and the low within a month post-crisis.
Company: Jet Blue (JBLU)
Crisis: On August 9, 2010, a fed up Jet Blue employee publicly quit and made an extreme exit by sliding down the exit chute to exit the grounded aircraft.
Pre-Crisis Stock Price: August 9, 2010 - $6.24
Post-Crisis Stock Price: August 17, 2010 - $6.04
Company: Nike (NKE) and all other sponsors
Crisis: A scandal was unleashed when Golf star Tiger Woods crashed his car into a tree near his home. It was soon discovered that he and his wife had been fighting because Woods had been cheating-- with more than a dozen mistresses.
Pre-Crisis Stock Price (NKE): November 25, 2009 - $65.70
Post-Crisis Stock Price (NKE): December 9, 2009 - $61.95
Company: Exxon (XOM)
Crisis: An oil tanker, Exxon Valdez, ran aground on Bligh Reef in Prince William Sound, Alaska on March 24, 1989. Within six hours, approximately 10.9 million gallons of oil spilled into the bay. The crash destroyed over 1,100 miles of Alaska's coastline.
Pre-Crisis Stock Price: March 23, 1989 - $11.125
Post-Crisis Stock Price: April 11, 1989 - $10.4375
Company: Apple Inc (AAPL)
Crisis: October 3, 2008 - CNN's iReport had a false, user-submitted story about Apple's CEO Steve Jobs being rushed to the hospital with a heart attack. Business Insider's SAI broke the rumour in the morning and announced it false that afternoon, but the company's stock still took a temporary, few-hour nose dive.
Pre and Post-Crisis Stock Price: The story was resolved within a few hours, so the stock bounced back with no change by the end of the trading day to $104.
Company: Apple Inc (AAPL)
Crisis: January 14, 2009 - After denying he was ill, Steve Jobs announced he was taking a leave of ab sense from the company to take care of his health. The day the news broke, shares fell 7%.
Pre-Crisis Stock Price: January 8, 2009 - $92.70
Post-Crisis Stock Price: January 20, 2009 - $82.33
Company: Toyota (TM)
Crisis: 4.2 million Toyota and Lexus vehicles were recalled due to faulty floor mats that jammed gas peddles and caused accidents. The recall was announced on September 29, 2009.
Pre-Crisis Stock Price: September 10, 2009 - $85.46
Post-Crisis Stock Price: October 5, 2009 - $75.07
Company: Johnson & Johnson (JNJ)
Crisis: Seven people died in the Chicago area after taking Tylenol because someone had laced the pills with cyanide. The first deaths occurred on September 29, 1982 and the product was recalled on October 5, 1982.
Pre-Crisis Stock Price: September 28, 1982 - $2.9453
Post-Crisis Stock Price: October 5, 1982 - $2.4375
Company: Hewlett-Packard (HPQ)
Crisis: After his alleged sexual harassment of Jodie Fisher was made public, the former HP CEO stepped down, although it is speculated that he was voted out by board members and left quietly with a large severance package.
Pre-Crisis Stock Price: August 5, 2010 - $46.35
Post-Crisis Stock Price: August 27, 2010 - $38.00
Company: Toyota (TM)
Crisis: 2.3 million cars and trucks dating back to 2005 Toyota models were recalled, in addition to the 4.2 million recalled a few months prior. Roughly 1.7 million vehicles were listed as recalls on both the September recall list and the January recall list. The second recall oc cured on January 21, 2010.
Pre-Crisis Stock Price: January 21, 2010 - $90.42
Post-Crisis Stock Price: February 2, 2010 - $71.78
Company: Merck (MRK)
Crisis: On September 30, 2004, Merck was forced to recall its Vioxx drug because of evidence that it may have caused thousands of heart attacks and cardiac deaths.
Pre-Crisis Stock Price: September 29, 2004 - $45.07
Post-Crisis Stock Price: September 30, 2004 - $33.00
Crisis: Roughly 6.5 millions Firestone tires on Ford Explorers were recalled after over 150 deaths and more than 1,000 reported incidents were linked to tires blowing out on high speed vehicles.
Pre-Crisis Stock Price: August 8, 2000 - $22.60
Post-Crisis Stock Price: September 11, 2000 - $11.08
Crisis: On April 20, 2010, gas from a BP well, under high pressure, shot up and out of a drill column, ignited and exploded, killing workers, and causing an oil gusher miles below the ocean surface to leak gallons of oils for three months straight. The leak was finally stopped on July 15, 2010 after 185 million gallons of oil were spilled.
Pre-Crisis Stock Price: April 20, 2010 - $60.48
Post-Crisis Stock Price: Within 13 days, stock prices dropped $10+. By July 25, 2010 (oil still gushing) - $27.02
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