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

Michael Leeds

Applied Economics Letters, 2010, vol. 17, issue 8, 805-808

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.

Date: 2010
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DOI: 10.1080/13504850802464109

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