Academic

Pfizer Used Monday as "Taking Out the Trash Day"

By Gordon Smith, Christine, Hurt, Vic Fleischer, Fred Tung, Lisa Fairfax, David Zaring

I've been watching The West Wing from the beginning lately as I use our home treadmill during these way, way, way below freezing months we've been having.  So, when I noticed that Pfizer was timing its official announcement of its acquisition of Wyeth on Monday along with the announcements of some not-so-wonderful news, I thought "Pfizer is taking out the trash."  In Episode 1 of the West Wing, the staff uses a Friday as "trash day," where a lot of embarassing stories are disclosed in hopes that they will cancel each other out and not be noticed so much over the weekend.

In Pfizer's case, leaks of the Wyeth acquisition had buoyed the stock to $17.45 on Friday, but Monday morning found the stock sliding to a close of $15.65.  ($15.82 on Tuesday, $15.42 today).  This reaction was not cold feet over the acquisition or even normal acquirer stock price drop.  It was probably a reaction to the stream of bad news Wyeth released on Monday morning, hoping it would be eclipsed by the acquisition news:  Pfizer would be eliminating 19,000 jobs (Pfizer jobs, not even Wyeth jobs. . . yet); slashing its dividend in half; and settling with federal investigators over bad advertising of its painkiller Bextra.  Without the acquisition, who knows how much attention these items would have gotten, and how more negatively the stock price would have been affected. 

Full post as published by Conglomerate on January 28, 2009 (boomark / email).