A review of historical U.S. stock market data shows that romantic scandals involving company founders or CEOs often have varying degrees of short-term impact on a company’s market value.
Let’s look back at several notable historical cases:
At Amazon ($AMZN), after news broke that Bezos had cheated on his current partner, the company’s stock fell 1.6% that day.
Former HP ($HPQ) chief Mark Hurd was found to have had an affair with a company contractor and covered it up by falsifying expense reports. The company’s stock plunged 10% in after-hours trading and was still down 8% at the close the following day.
At Intel ($INTC), Brian Krzanich’s improper relationship with a subordinate led the company’s stock to fall 2.4% on the day the news broke.
Best Buy ($BBY) executive Brian Dunn sparked public controversy after having an affair with a younger female employee. The stock rose and then fell that day, ultimately ending down 6%.
Boeing’s ($BA) Harry Stonecipher was involved in a scandal after having an affair with a female executive at the company, but the market reaction was relatively muted: the stock edged down just 0.14% that day, essentially remaining flat.
The scandal involving Microsoft ($MSFT) co-founder Bill Gates, who had an affair and subsequently divorced, did not trigger any notable negative response in the secondary market, with short-term share price movements close to 0%.
Looking across these events, we can conclude that the key factors determining the extent of a stock’s decline are whether the central figure is currently in office, how concentrated their shareholding is, and whether the incident affects the company’s actual business operations. By this logic, if a similar incident were to involve Jensen Huang, it is not entirely inconceivable that it could send the entire market tumbling for a full day in the short term.
Let’s look back at several notable historical cases:
At Amazon ($AMZN), after news broke that Bezos had cheated on his current partner, the company’s stock fell 1.6% that day.
Former HP ($HPQ) chief Mark Hurd was found to have had an affair with a company contractor and covered it up by falsifying expense reports. The company’s stock plunged 10% in after-hours trading and was still down 8% at the close the following day.
At Intel ($INTC), Brian Krzanich’s improper relationship with a subordinate led the company’s stock to fall 2.4% on the day the news broke.
Best Buy ($BBY) executive Brian Dunn sparked public controversy after having an affair with a younger female employee. The stock rose and then fell that day, ultimately ending down 6%.
Boeing’s ($BA) Harry Stonecipher was involved in a scandal after having an affair with a female executive at the company, but the market reaction was relatively muted: the stock edged down just 0.14% that day, essentially remaining flat.
The scandal involving Microsoft ($MSFT) co-founder Bill Gates, who had an affair and subsequently divorced, did not trigger any notable negative response in the secondary market, with short-term share price movements close to 0%.
Looking across these events, we can conclude that the key factors determining the extent of a stock’s decline are whether the central figure is currently in office, how concentrated their shareholding is, and whether the incident affects the company’s actual business operations. By this logic, if a similar incident were to involve Jensen Huang, it is not entirely inconceivable that it could send the entire market tumbling for a full day in the short term.