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Communicating Goodwill Impairment Charges/Asset Write-downs
Objectives
Minimize the negative reaction to a significant financial write-down of an acquired company.
Program
The Ruder Finn Investor Relations Group assisted NeuStar, Inc. in announcing two separate write-downs within seven months associated with an acquisition the telecommunications company made in 2006. Activities included:
- Counsel to senior executives on how to express the write-downs as transparently as possible to maintain credibility with investors and media,
- Developing language for news releases and investor conference calls to include context for the charges,
- Conducting a mock conference call to prepare executives and spokespersons for investor & media questions.
- Auditing institutional investors following the conference call to assess messaging traction.
Results
The first announcement resulted in a 23% decline in the stock price, but the second announcement met with a more positive reaction.
