The term “paracrisis” has gained attention in the realm of corporate communication, signifying a situation happening on social media that could escalate into a full-blown crisis if not managed properly. The study published in Corporate Communications, embarked on exploring how these paracrises impact company stock prices.
Utilizing a methodical approach, we have examined 25 different paracrises, employing secondary data analysis to scrutinize the stock market’s reaction to these events. The core of our investigation involved comparing stock prices before and during the paracrisis, ensuring no other market events interfered with the data.
The findings are quite revealing. Contrary to what one might expect, the study uncovered that paracrises do not significantly affect stock prices. The data showed no significant differences in stock values pre and post-paracrisis. Moreover, a strong correlation was observed between the trends in stock prices and the broader S&P 500 index, suggesting that market forces played a more crucial role than the paracrises themselves.
This study indicates that from a financial perspective, paracrises might not warrant the level of concern they often receive. For companies and investors alike, this insight could recalibrate strategies for managing potential paracrises, focusing on communication and reputation management without the immediate fear of stock price turmoil.
Click on link to download the full publication: Implications of the paracrises on the companies’ stock prices.
Citation: Selaković, M, Ljepava, N, Mateev M (2019). Implications of the paracrises on the companies’ stock prices. Corporate Communications: An International Journal
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