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October 2, 2014

Company Reputations and Share Prices: Negatively Affected Online

Igniyte are regularly contacted about the removal of negative online content that are posted online. This is because of the impact it has on a client’s reputation. But companies are now noticing the effect it is having on their share prices.

A not so common reason for companies contacting us, is when negative comments online are negatively affecting the value of the business, specifically the share price. The share price is integral to the investments a business sees and in most cases, takes years to build. With negative comments or reports surfacing online, the share price can see an immediate effect.

ThisIsMoney

Share Prices falling due to a negative online reputation.

In an article by This Is Money, they talk about the vast number of attacks that companies are facing online. This vulnerability online can be damaging at an overwhelming level.
Quindell had £1 billion wiped off their value earlier this year, because of a report that was published online by an unknown organisation.

Research from BDO and the Quoted Companies Alliance found that 44% of small and medium sized firms had experienced allegations or rumours about their company on the internet. Of these allegations, 71% had been posted on discussion forums, 49% had been posted on blogs and 44% appeared on social media sites.
Almost two thirds of the firms with negative allegations, ignored them, 18% responded directly or through a press announcement, 9% sought removal by legal means and 17% took other action.

The two thirds who ignored the allegations, may have thought that ignorance was bliss and that it would all go away if they didn’t respond. But by ignoring the rumours and allegations, they only proved to their critics the lackadaisical attitude towards their company’s reputation. The failure to address the problems or to respond shows how little value they have for the founded or unfounded comments online.

When dealing with rumours or allegations like what these companies have experienced, the best thing to do is to respond. Scott Knight of BDO said: ‘A lot of companies have said they are impacted negatively by stories and it is very difficult to respond.’ If something appears online which goes on not being responded to by the company, it’s likely that similar allegations will appear online. This will further damage a company’s reputation and share price.

We recommend that when something like this comes to light, you should always make every effort to respond to the allegations or by contacting the website directly, quoting it’s terms and conditions or citing the UK Defamation Act in order to have it removed.

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