On Tuesday, August 4th, 2020, Novavax (NVAX) reported Phase 1/2 results for their COVID vaccine. The stock closed at about $150. In after hours trading, a journalistic error caused the stock to trade as low as $104 and as high as $179.
Wow, what a roller coaster! Typically, these swings only occur when Gordon Gekko and Sir Larry Wildman fight over Blue Star Airlines.
The Twitterverse is irate with the journalist, but the Investor Relations efforts shares blame here, too.
There are two items to focus on: (1) the data embargo, and (2) controlling the narrative.
The Data Embargo: A journalist with embargoed data has a duty and obligation to go to all lengths to make sure the story is correct. Investor Relations has an obligation to ensure acceptable measures are taken by the journalist to get the story correct, too.The article needs to be written well in advance and at least fact checked with IR. If a journalist disagrees, then they have no right to the data. The journalist error in this case cost investors millions. On Wall Street, errors that cause million dollar losses typically places you on waivers for terms of your unconditional release.
Controlling the Narrative: The IR team needs to always be in control of hte narrative. Providing embargoed data without checking the final article relinquishes control of the narrative. Starting your earnings call with the journalist news story has been updated means you lost.
Bottom line: While not deadly, errors can cost investors millions. In IR, nothing can replace the experience of having a call or investment go south in such an extreme fashion.
As I like to say, in Investor Relations, I lived it so you dont have to!
