headline risk

Headline Risk

The risk that a company may decline in share price because of negative news coverage. For example, rumors that a company's earnings are declining may cause shareholders to sell their stock. Even if the news itself is not true, headline risk can cause significant volatility for the stock in the short-term. For this reason, companies often price out the news by slowly leaking information before it is announced to minimize surprises and reduce the power of false rumors. See also: CNN effect.

headline risk

The possibility a negative news story will spread to other media outlets and cause a significant change in the value of an investment. For example, an unconfirmed report of a corporate management shakeup might be picked up by competing newspapers and television networks, thus causing a sharp decline in the company's stock price. The firm's stock price is likely to be subject to substantial volatility even though the story eventually proves false.
References in periodicals archive ?
Concerns have faded, and it doesn't seem like we'll see much headline risk from Cyprus as the European Central Bank continues to work toward a solution," said Mark Martiak, senior wealth strategist at Premier/First Allied Securities in New York.
The headline risk remains, as Dubai World is still involved in a fluid process, so it is still key to proceed the dialogue with international investors," said Ali Khan, managing director and head of brokerage at Arqaam Capital.
Significant international flows are one factor that would cause these markets to pick up, but headline risk has them mostly on hold," said Florence Eid, Chief Executive of research and advisory firm Arabia Monitor.
SLG's results bolster our view that the headline risk of financial services-related layoffs and the resulting overhang on the shares may be overdone," the report said.
Rabies is the headline risk, but it is not the most common problem they face.
With deferred comp in the toilet and headline risk through the roof, who can blame them?
36 per cent in October as most managers traded with confidence throughout the month, despite the headline risk emanating from a political deadlock in the US Congress.
We also believe that headline risk is likely to persist given
Not just sovereign but to some corporate names which have limited exposure to the scandal, but have sold off on overall headline risk," Yangol said.
REITs are not immune from recent headline risk regarding ongoing commercial real estate fundamental challenges,' said Marks.
Select manufacturing issues present headline risk, although Fitch does not believe these issues will affect Baxter's credit rating.
More practically, since the SEC conducts random periodic inspections of registered advisors, advisors that are careful and attentive to the SEC's rules avoid unnecessary distractions and headline risk.