Did a ‘Dead Bee’ Bite Your Digital Reputation? Hedge Fund Feels Sting

“You ever been bit by a dead bee?”  That’s a famous quote from the 1944 Humphrey Bogart and Lauren Bacall film, “To Have and Have Not”.

What does a quote from a 71-year-old black-and-white movie have to do with today’s colorful, digital world?

The Wall Street Journal reported on June 30 that a decade-old press release caused oil-and-gas producer Penn Virginia Corp’s stock to drop more than 8%. News circulated earlier this week that Penn Virginia rejected a takeover offer from oil giant BP PLC. That never happened. Back in June 2002, some 13 years ago, BP Capital Management (no relation to BP Oil) tried to buy Penn Virginia. Penn Virginia declined. Case closed.

But the 2002 press release disclosing the attempted buyout still lives online. When a reporter came across it, he or she didn’t realize that the announcement was 13 years old and had nothing to do with the former British Petroleum. Analysts believe there was confusion because the old release was dated June 25 and mentioned a company referred to as BP. But there was no year in the dateline of the release and it wasn’t referring to the oil company.  Sloppy reporter, “machine journalism” or a search engine error, the cause is hard to discern. Penn Virginia probably didn’t think much of the erroneous report or old press release, at least until it saw a big dip in its stock.

A Connecticut-based hedge fund and owner of two million shares of Penn Virginia also was stung.  The investment firm issued a press release on PR Newswire, later picked up by Reuters and other news services, urging the company board to “undertake a robust strategic alternatives process” as a result of the 13-year-old offer.  It went on to criticize the company’s performance and “entrenched” board.  It further threatened “any actions” if Penn Virginia rejected any offer at a premium to the company’s stock price.  As there was no offer, the press release just added to the turmoil and increased the volume to the dead bee’s buzz.

What’s the lesson here?  Old documents, much like dead bees, can come back to bite you — particularly if you aren’t properly managing your digital reputation.

We had a similar situation at Lumentus with a client earlier this year. Our client won a government lawsuit filed against it. A few years later, the dead bees started buzzing and “breaking news” headlines started making their way across websites, blogs and social media announcing the original – but already settled – suit. Despite winning the lawsuit, our client had a new problem, its perception.

With billions of Google searches conducted each month, odds are that your company and employees are being searched. In today’s online ecosystem, you can’t just hire an exterminator to eliminate the bees, or old news. Instead, you must actively monitor, manage and react to protect your reputation.

If you ensure that your “digital fortress” is well built, your sentries will alert you to emerging potential danger, and only a strong online presence and plan to quickly react will help protect you. That is why it is so important that you own your namespace and carefully manage your digital reputation.

Back to our own client. To protect its reputation, we took several steps to push accurate, current and positive stories to the top of search pages. Creating timely content, optimizing our client’s website and updating social media channels were just some of the actions we took to set the record straight and successfully repair its reputation.

Had Penn Virginia been more closely monitoring its digital reputation, chances are that the old press release would not have been so easy to find and its stock wouldn’t have taken such a hit. In the digital age, dead bees can come back to bite you, your bottom line or your stock price at any time. Managing your digital reputation can help keep the bees in the hive.