Situation overview:

An unexpected charge was announced in a company's quarterly earnings release, resulting in its stock value plummeting more than 70 percent the day of the announcement. Investors were enraged by the surprise announcement, and the following trading days offered no relief.

PROI member Role:

A  PROI Worldwide Americas Crisis Group partner was hired the day after the announcement to address the company's weakening stock valuation in the short term, and rethink its investor communications strategy and restore its credibility over the long term. Work included:

• Analyzing the flow of information prior to the announcement to determine recommendations for future investor communications, particularly focusing on quarterly announcements over the past 12 months;
• Evaluating investor feedback to determine key areas of improvement; and
• Working with senior management to develop an investor briefing document, filed as an 8-K, that clearly communicated information on the unexpected charge and served as a discussion guide for follow-up discussions with investors.

Results:

The filing of the investor briefing document allowed management critical time to more fully develop the financial restructuring plan based on the PROI Worldwide Americas Crisis Group partner's recommendations. The volatility in the stock subsided, and the company’s commitment to transparency throughout the implementation of its restructuring plan helped cultivate increased credibility for the management team.