Interesting points from Duncan on How to react to negative reports: [Analyst Equity] “When analysts attack”.
We’d add two points to his analysis:
- Vendors need not to over-react to negative reports; it has often unwanted consequences like the analysts sniffing a sweet-spot.
- A fair criticism is often not a bad thing, as it positions the research note as truly independent. If you want marketing brochures, write them yourselves.
He however assumes one’s always dealing with rational, unbiased and honest analysts. Quite unfortunately, this is not always the case, as we’ve seen analysts verging on the sanity engage in passionate and irrational arguments with vendors for the sake of having an intellectual contest.
We believe those are actually a small minority, but most vendors quite rightly do not react well to this treatment. Seeing an analyst spitting out a competitor’s FUD year after year probably also falls into this category.
In those extreme cases, we suggest escalating to management level, to cut funding (at least temporarily) and ignore deliberately the analyst for a while…