In the rubber industry, nearly every company is for sale, and everyone is talking about buying or selling a business. All the time.
Even privately held, family-owned businesses great-grandpa founded and succeeding generations poured their sweat and blood into can be in play at any time. That's just the way it is.
That doesn't mean all companies are being shopped all the time. A lot of owners have no intention of ever selling out. However, if an offer is just too good to reject, well ...
That's why when a rumor popped up that India's Apollo Tyre is negotiating to buy U.S.-based Cooper Tire, I was not surprised. People and companies always talk.
Except to the press. Neither Apollo nor Cooper had anything to say when we contacted them. Feel free to read into that anyway you want.
Apparently, Wall Street did. Cooper's stock jumped 11 percent on the rumor. And therein lays one of the reasons this publication did not run a story about an unsubstantiated report appearing in the “Economic Times” Oct. 11.
If we broke that story, I'm certain it would have affected Cooper's stock price. This isn't ego, just an observation that in this Internet age, a story like this immediately grows legs and runs on the web throughout the world.
Here's how it works: The Economic Times cited “two people with direct knowledge of the matter.” From what I found, none of the other media outlets that covered the story—from Reuters to the World Socialist Web Site—had any further inside information. What they did have was commentary from stock analysts, who usually are quite willing to speculate on such subjects.
My favorite comments were by a journalist at Forbes who bills himself as someone who writes “about picking stocksÃ but also fun stuff, too.” He stated “When it comes to buyout rumors, the scorecard tends to be pretty crappy. But this doesn't stop shares from moving on the news.”
My point exactly.
Yes, we will use anonymous sources for certain stories, mostly people with valuable expertise commenting on trends, regulations or markets who are leery about having their names published.
It's a higher bar when we use insiders to talk about company-related activities. The person has to be in a position to know what is being revealed, and we'll seek alternate sources and information to verify what has been said.
I imagine the Economic Times, a major player in the global business press, has similar standards. But since we don't know the sources in the article, let alone the reporter who broke the story, we're not about to help legitimize the report by running speculation on the subject.
Why write about this now, a good two weeks later? Well, this is an opinion piece, not a news story, and nothing I'm writing will affect stock prices.
Is Apollo out to acquire Cooper? Maybe—maybe not. If we find out more, we'll tell you.
Noga is the editor of Rubber & Plastics News.