Bear Stearns: How to Sequence Yourself a Good WSJ Headline

You're a day away from announcing your first-ever quarterly loss in your 84-year history, the troops are already fully demoralized, the morning's headlines say federal prosecutors are investigating you for insider trading, and Gasparino is ruining lunch by telling the world the board is looking to replace your chairman/CEO.

So how do you get the best headline you can out of it?

Well, if you're Bear Stearns, you could leak the fact that the big boys at the top will not be taking a bonus, despite the fact that your ROE targets were soft enough that a small bonus pool actually existed. Leak it to one outlet, and you're sure to get the big play usually dedicated to a scoop. Make that outlet the Wall Street Journal, and you're sure to get automatic follow-up from the wires, and the stampede begins.

And then when you're earnings are finally announced, the executive humility will likely assert itself as a decent part of the story. (Unless, of course, this post gets read first.)

Is that what happened tonight?

Dunno.

But Kate Kelly and Randall Smith's story on Jimmy Cayne foregoing his bonus has all the traditional earmarks of a strategic leak, as the information is (a) truly internal, (b) completely beneficial to the company's leadership, and (c) timed to influence what should be bad news the next day.

While the exclusive-leak dynamic is well-known, this one is provides a great lesson in the power of sequencing.

How so? Well, look at that Bear's three sequencing options.

Option 1: Leak the no-bonus info in advance, and watch it get decent play as its own story, and thus color the coverage of the earnings loss.

Option 2: Include the no-bonus info in the earnings announcement, and watch it get buried in paragraph 26 of a summary story rehashing the firm's risky strategy, absentee management and failure to banish the boss the same way two other banks with similar stories have done.

Option 3: Wait a day after the earnings release before announcing the no-bonus info, and watch the coverage characterize it as a punishment, instead of as an act of managerial prudence.

Yes, sequencing can indeed completely change the framing of a story.

Also, are you a little skeptical that the Journal isn't quite as powerful as some say when it comes to driving Wall Street's spin?

Well, recall that it was Kelly -- Kate, not Kitty -- who not only broke the insider-trading investigation, but also broke new ground in the Journal's running start in becoming a better read under News Corp., not exactly the kind of story that gets rewarded a few weeks later with an exclusive.

And that's why Rupe "over-paid."

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