Corporate paranoia leaves a pungent aftertaste

Milwaukee-based Sensient Technologies Corp. has long had a reputation of being a company with very thin skin.

That will happen when you go out of your way to file lawsuits against employees who post unflattering comments about you on Internet message boards.

That will happen when you seek a court order to stop a local business publication from reporting some unflattering information about you.

But Sensient apparently felt compelled to shoot itself in its public relations foot one more time this week, just for old time's sake.

Sensient, which manufactures and markets colors, flavors and fragrances, decided to take the unusual step of publicly rebuking a prominent Wall Street analyst this week after that analyst had made an error in calculating the track record of Sensient's stock.

Sensient decided to release the following press release in response to the analyst's error: "Prudential Equity Group analyst John McMillin, in his most recent research report on Sensient Technologies Corporation, incorrectly stated that Sensient's common stock reached a price of $30 per share in April 1997. In fact, when properly adjusted for splits, the company's stock price during April 1997 never exceeded $17.69. Furthermore, at no time prior to April 20, 2007, has the price of Sensient's stock, when properly adjusted for splits, ever exceeded $27.75 until this past Friday, when the stock reached an intra-day high of $30.34. Sensient believes Mr. McMillin made the incorrect statement about Sensient's stock price in an attempt to minimize the company's recent success."

McMillin acknowledged he made a mistake in his report about Sensient's stock history, but denied he intentionally misled anyone.

"I made a mistake, but it was not done intentionally. I have no agenda against them," McMillin told Small Business Times. "I made a mistake. But my record speaks for itself."

McMillin said the "bottom line" is the "(Sensient) stock has done nothing for nine years, and we stated 10 years."

In his official retort to Sensient, McMillin wrote, "In our 20-plus years following food stocks, we have made a mistake or two in our numbers calculations, but never have we seen a company issue a press release on it."

So what was the fallout of this debacle? Instead of an analyst saying Sensent's stock had been lackluster for 10 years, the company got nasty and forced the analyst to say that it had only been lackluster for nine years.

Now, maybe that I perceived as triumph for the egos in Sensient's board room, but the bottom line was it doubled the attention paid to the analyst's report, and Sensient's stock promptly dropped $1.01 per share.

Sensient's implication that McMillin had intentionally tried "to minimize the company's recent success," is hardly plausible.

McMillin has bigger fish to fry. He is widely acknowledged as an expert in the food production industry, covering such corporate behemoths as Unilever PLC, Nestle S.A., Tyson Foods, Smithfield Foods, General Mills, Hershey Co., Campbell Soup, Heinz Co., Kraft Foods, Kellogg Co., Sara Lee, ConAgra Foods and Archer Daniels Midland.

To think that McMillin has the time or the inclination to intentionally make errors about Sensient - at the expense of his own reputation - is a stretch. A big stretch.

Now, in the interest of full disclosure here, I was the managing editor of the business news publication that Sensient unsuccessfully attempted to stop in 1999.

But like a bad penny, flawed public relations just keep coming back to haunt a company that should have more important things to worry about.