Bayer Told Analysts of Cash Call Plan a Day Before Official Statement
Bayer informed several brokerages of its intention to seek shareholder approval for a substantial share issue just one day prior to its formal announcement, which caused a notable decline in its stock price. The proposed increase of approximately 35% in shares outstanding is aimed at covering potential U.S. litigation costs, leading to a drop of up to 10% in share value following the news. Analysts expressed surprise at the market reaction, suggesting that the cash call could have been interpreted positively as a step towards resolving ongoing legal challenges.
- This incident highlights the delicate balance companies must maintain in managing investor communications and the potential repercussions of perceived information asymmetry.
- What strategies should companies implement to ensure transparency while protecting sensitive information before official announcements?