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Is bad news always bad? The impact of Floyd Landis's rise and fall on Phonak

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  • Michael Leeds

Abstract

In the space of one week, cyclist Floyd Landis went from hero to villain when his remarkable comeback to win the 2006 Tour de France was nullified by a positive drug test. I use event study techniques to analyse the impact of Landis's rise and fall on the profitability of Phonak, his team's sponsor. I find that neither his spectacular win nor his rapid fall had an immediate impact on Phonak but that there was a significant cumulative abnormal return to Phonak stock in the wake of these events. I conclude that Phonak benefited from both the good and bad news about Landis.

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  • Michael Leeds, 2010. "Is bad news always bad? The impact of Floyd Landis's rise and fall on Phonak," Applied Economics Letters, Taylor & Francis Journals, vol. 17(8), pages 805-808.
    • Handle: RePEc:taf:apeclt:v:17:y:2010:i:8:p:805-808
    DOI: 10.1080/13504850802464109
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    Cited by:

    1. Robert Finger, 2010. "Stock price responses on the German suspension of genetically modified maize," Economics Bulletin, AccessEcon, vol. 30(3), pages 2220-2229.
    2. Stefan J. Hock & Sascha Raithel, 2020. "Managing Negative Celebrity Endorser Publicity: How Announcements of Firm (Non)Responses Affect Stock Returns," Management Science, INFORMS, vol. 66(3), pages 1473-1495, March.
    3. Sherry Bartz & Alexander Molchanov & Philip Stork, 2013. "When a celebrity endorser is disgraced: A twenty-five-year event study," Marketing Letters, Springer, vol. 24(2), pages 131-141, June.

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