The Thankless Job of a PR Frontman
As an academic who only has to deal with an institution that just wishes I kept my mouth shut more but doesn’t really press the issue (with some very real exceptions), I have the ability to speak the truth as I see it and not worry about public relations. In a way I feel bad for public relation guys that have to spin indefensible positions at the behest of their masters. Today we have two great examples.
Last week after hearing about the impressive run up of Olam prior to the Temasek buyout, I raised the possibility that the price gains prior to the buyout raised concerns. Enter the Singapore Stock Exchange, who released a statement saying that there was no concern about information leaks because analysts had raised their price target for Olam. This is a weak response at best because as the Wall Street Journal noted “Even after all those upgrades, the consensus target was only 1.68 Singapore dollars (US$1.33), according to FactSet, just a single Singapore cent higher than at the start of the year and far below the S$2 the stock hit just before the deal was announced.” Just to be clear, the Singapore Stock Exchange is claiming that an increase in the consensus estimate to $1.68 explains the one month move from $1.43 to $2. Interestingly, according to Thompson/FirstCall, only two brokers changed their hold recommendations to buy out of a total of 18 with buy/sell recommendations. Let’s look a little closer at the how fast the price moved presented below in Figure 1 with all d