Ben DiPietro, The Wall Street Journal’s Risk & Compliance Journal, October 19, 2016
Food processor Tyson Foods Inc. takes crisis center stage after being accused of rigging poultry prices. Lawsuits filed against Tyson allege the company and other producers engaged in fixing prices for its poultry products, prompting one analyst to issue a report suggesting the issue could become a big problem for Tyson—news that sent the company’s stock price lower. Other reports struck a different tone about the company, and the stock rebounded the next week.
Tyson sent out a statement in which it vowed to defend itself against the allegations, saying: “While we don’t normally make substantive comments regarding pending litigation, we dispute the allegations in the complaints as well as the speculative conclusions reached by the analyst, and we will defend ourselves in court.”
Using the company’s statement, the experts break down its response, how well it communicated its message, and what it should do next?
“Tyson Foods felt it had to respond when an industry analyst advising hedge funds issued a report that sent the company’s share price into a dive,” says Davia Temin. “And probably, to its lawyers, it did seem like a spirited and substantive response–but not really. In reality it was a three-sentence statement that said almost nothing.” […read more]