Weekly Reputation Index Metrics

At the close of trading 27 Oct 2011, the RepuStars® Variety and Repustars Prime Composite Indices stood at 252.71 and 214.31 respectively. Over the past four weeks, the former Index has increased by 11.12%, while the latter has increased by 11.64%. The benchmark S&P500 Composite Index stood at 114.42 (5 April 2002=100) and has increased over the past four weeks by 10.7%.

Over the trailing twelve months, the RepuStars Variety and Prime Composite Indices have, respectively, gained 11.96% and 6.59% respectivley; the S&P500 Composite Index has gained 8.52%. Since January 2009, the RepuStars Variety and RepuStars Prime Composite Indices have gained 99.37% and 92.76% respectively; the S&P 500 Composite Index has gained 37.86%. Other interval changes in the magnitude of the indices are shown below.


The RepuStars® family of composite indices represent a strategy of reputation arbitrage and reflect the added value of reputation resilience. The RepuStars® Prime Composite Index comprises no more than one firm in each of 20 major sectors with the greatest potential for reputation-linked equity appreciation sampled from the large-cap segment of the U.S. equities market. The RepuStars Variety Composite Index comprises no more than 3 firms in each of 19 major commercial sectors. The benchmark metric is the S&P 500® Composite Index.

The RepuStars indices are reconstituted annually in the first week of January. The Indices were last reconstituted 6 Jan 2011.  Click here for additional information on the indices.

Reputation, Risk and Finance

Reputation management through superior control of a company's intangible assets may be one of the best paths to value creation today. If it is not on your agenda, perhaps it should be. Here are several things you can do right now to start creating value for your organization:

1. Become better informed. Participate in our regular Mission Intangible Monthly Briefings held on the first Friday of every month or read the book, Mission: Intangible. Managing risk and reputation to create enterprise value, available at the IAFS Store or other leading online book retailers. 
2. Become a member of the Intangible Asset Finance Society and engage.
3. Join our community on Linked-In and stay in the information flow. 

REPUSTARS is a registered trademark used under license.

Ever since Stone v. Ritter sensitized corporate boards to the risks of not protecting a firm's intangible assets, there has been a progressive growth of intangible asset monetization programs. These have been recently supplemented by nascent reputation risk management programs.

From time to time, a booster has enhanced that sensitivity. Today we have a good example of that.The disposition of Kodak's (NYSE:EK) patent portfolio is exemplary.

As reported by Bloomberg (10/27, Keehner, McCracken, and Saitto), "Eastman Kodak Co.’s lenders sent a letter to the board of directors reminding the company of its fiduciary duty to sell its patent portfolio for fair market value. " In case you are missing the punch line, the article explains that "'Kodak’s board has been put on notice by lenders, who are saying ‘If you destroy value, we will sue you,’' said Amer Tiwana, an analyst at CRT Capital Group LLC in Stamford, Connecticut."

The reputation metrics, as we noted earlier, reflect low expectations and suggest progressive value destruction of the likes that moved Johnson & Johnson's equity holders to sue last December.


Over the trailing twelve months, the Steel City Re Corporate Reputation Index ranking for Kodak decreased from the 12th percentile to the lowest rank of zero (0) among the 29 firms comprising the Electronic Appliances sector. The exponentially weighted moving average of the volatility of the reputation index was most recently under 7%, and the twelve week trailing vector and velocity were most recently -55% and -7%. The corresponding return on equity over the trailing twelve months has been a dismal -44% relative to the median of its peers.

The company's intangible asset fraction is now in excess of 500% of enterprise value which would indicate to some that the patent portfolio is worth more than $1.25 billion. The creditors would like to get their hands on that value. The company's equity value is around $250 million. The equity holders are loathe to surrender that excess intangible value. The board is between the two, and that is not a pretty picture.

Weekly Reputation Index Metrics

At the close of trading 20 Oct 2011, the RepuStars® Variety and Repustars Prime Composite Indices stood at 235.44 and 196.08 respectively. Over the past four weeks, the former Index has increased by 5.77%, while the latter has increased by 5.17%. The benchmark S&P500 Composite Index stood at 108.25 (5 April 2002=100) and has increased over the past four weeks by 7.6%.

Over the trailing twelve months, the RepuStars Variety and Prime Composite Indices have, respectively, gained 6.00% and lost 0.42%; the S&P500 Composite Index has gained 2.98%. Since January 2009, the RepuStars Variety and RepuStars Prime Composite Indices have gained 85.75% and 76.37% respectively; the S&P 500 Composite Index has gained 30.43%. Other interval changes in the magnitude of the indices are shown below.


The RepuStars® family of composite indices represent a strategy of reputation arbitrage and reflect the added value of reputation resilience. The RepuStars® Prime Composite Index comprises no more than one firm in each of 20 major sectors with the greatest potential for reputation-linked equity appreciation sampled from the large-cap segment of the U.S. equities market. The RepuStars Variety Composite Index comprises no more than 3 firms in each of 19 major commercial sectors. The benchmark metric is the S&P 500® Composite Index.

The RepuStars indices are reconstituted annually in the first week of January. The Indices were last reconstituted 6 Jan 2011.  Click here for additional information on the indices.

Reputation, Risk and Finance

Reputation management through superior control of a company's intangible assets may be one of the best paths to value creation today. If it is not on your agenda, perhaps it should be. Here are several things you can do right now to start creating value for your organization:

1. Become better informed. Participate in our regular Mission Intangible Monthly Briefings held on the first Friday of every month or read the book, Mission: Intangible. Managing risk and reputation to create enterprise value, available at the IAFS Store or other leading online book retailers. 
2. Become a member of the Intangible Asset Finance Society and engage.
3. Join our community on Linked-In and stay in the information flow. 

REPUSTARS is a registered trademark used under license.

On October 5, 2011, Steven Paul "Steve" Jobs died at his home in Palo Alto, California at the age of 56. Recognized on his death certificate as an "entrepreneur" in the "high tech" business, he is most closely associated with the company he founded in the late 1970’s – Apple Inc. (NASD:AAPL).

Six weeks prior to his death, he resigned as the company’s CEO. The Corporate Reputation Index metrics from Steel City Re testify to Mr Jobs’ ability to transfer his spirit to his company. Eight weeks since his resignation, the company’s reputation remains at the peak of its sector – a post it has held unchallenged for the trailing twelve months.



Given that when a company is in the No. 1 reputational slot among 17 companies in the Computer Processing Hardware sector and that there is only one direction for change, twelve steady months of zero (0) reputational volatility is an impressive achievement.


For this to occur in a sector whose median rank is below the 50th percentile among more than 5000 companies monitored by Steel City Re, and that the loss of its iconic founder, CEO, and Chairman had no material effect even 8 weeks out, is testimony to the reputational resilience Mr. Jobs conferred on his company. We call it reputational perfection.

Weekly Reputation Index Metrics

At the close of trading 13 Oct 2011, the RepuStars® Variety and Repustars Prime Composite Indices stood at 235.43 and 196.86 respectively. Over the past four weeks, the former Index has decreased by 3.54%, while the latter has decreased by 3.57%. The benchmark S&P500 Composite Index stood at 107.21 (5 April 2002=100) and has decreased over the past four weeks by 0.45%.

Over the trailing twelve months, the RepuStars Variety and Prime Composite Indices have, respectively, gained 6.04% and 0.58%; the S&P500 Composite Index has gained 2.54%. Since January 2009, the RepuStars Variety and RepuStars Prime Composite Indices have gained 85.75% and 77.07% respectively; the S&P 500 Composite Index has gained 29.18%. Other interval changes in the magnitude of the indices are shown below.


The RepuStars® family of composite indices represent a strategy of reputation arbitrage and reflect the added value of reputation resilience. The RepuStars® Prime Composite Index comprises no more than one firm in each of 20 major sectors with the greatest potential for reputation-linked equity appreciation sampled from the large-cap segment of the U.S. equities market. The RepuStars Variety Composite Index comprises no more than 3 firms in each of 19 major commercial sectors. The benchmark metric is the S&P 500® Composite Index.

The RepuStars indices are reconstituted annually in the first week of January. The Indices were last reconstituted 6 Jan 2011.  Click here for additional information on the indices.

Reputation, Risk and Finance

Reputation management through superior control of a company's intangible assets may be one of the best paths to value creation today. If it is not on your agenda, perhaps it should be. Here are several things you can do right now to start creating value for your organization:

1. Become better informed. Participate in our regular Mission Intangible Monthly Briefings held on the first Friday of every month or read the book, Mission: Intangible. Managing risk and reputation to create enterprise value, available at the IAFS Store or other leading online book retailers. 
2. Become a member of the Intangible Asset Finance Society and engage.
3. Join our community on Linked-In and stay in the information flow. 

REPUSTARS is a registered trademark used under license.

It is never good to stumble before your competitor rolls out a new product. Ever so much so when your competitor, Apple Inc., rolls out a new iPhone dubbed 4S the day before its iconic founder dies, and the phone acquires the moniker "4 Steve." In other words, this is not a good time to be Research in Motion (Nasdaq:RIMM).

The Globe and Mail (Oct 14, Babad) headlined the story this way: "Is Steve Jobs crowing in Heaven or RIM's week from hell?" Continuing the story, it notes "RIM is in what charitably might be called a rough patch. Its quarterly results disappointed investors, to put it mildly, the launch of its PlayBook tablet was weak, and there are questions dogging the Waterloo, Ont., group about its management structure. Then came what Queen’s University marketing professor John Pliniussen dubbed the "Blackout-Berry" as RIM reeled for three days this week to get its e-mail, instant message and Internet services back up and running for millions of BlackBerry users around the world."

The Street (Oct 12, Oran) more charitably stayed technical quoting company sources, "'Global disruptions in Research In Motion's service beginning earlier this week were caused by the breakdown of a core switch in Europe and the subsequent malfunction of its back-up system,' the BlackBerry maker said Wednesday in a press conference. These failures then resulted in a backlog of unsent messages which have caused service problems and disruptions for other RIM users around the world, including the U.S. and certain countries in South America, including Brazil and Argentina." But don't be lulled by the technical speak. When a technology company stumbles on a major service quality issue, its reputation takes a beating, its enterprise value falls precipitously (what else is going to go wrong?), and the sharks begin to circle.

Motley Fool (Oct 14, Kawamoto) observed that "Fast-moving Jaguar Financial is breathing down the neck of Research In Motion (Nasdaq: RIMM), and if the BlackBerry maker isn't careful, it could see a dramatic change in its board of directors and potentially management as early as three months from now. Under Canadian securities laws, investors holding a 5% stake in a company -- either individually or as a group -- are allowed to call a special meeting, says Chris Makuch, vice president at proxy solicitation firm Georgeson. And once a formal letter is sent to a company requesting a special meeting, the clock starts ticking and the process takes roughly 80 days to complete, notes Makuch, who works in Georgeson's Canadian office."

How bad is it? Turning to the Steel City Re Corporate Reputation Index metrics, over the trailing twelve months since Steve Jobs declared war on RIM, the company's reputation index metrics have slipped from the 64th to the 46th percentile among the 70 components of the Telecommunications Equipment sector. The company's exponentially weighted moving average reputational metric volatility has stabilized at 42.6%. The trailing 12 week velocity is a miniscule 1% and the trailing 12-wee vector is 87.8%. Not surprisingly, the company is under performing the median of its peers by nearly 34%.


The sector is suffering the general tribulations of a volatile economy and is showing an general reputational decline. That provides little comfort to RIM which, as a major holder of intellectual property rights, could be valued on its breakup and licensing fee value. With the market cap component comprising intangible assets now representing only 40% relative to the peer group median of 60%, it appears equity investors are placing less value in the management of those assets.


The list of companies stumbling badly after a reputational crisis continues to grow. One could hope that a massive PR effort might help reverse the tide of adverse news. One would be wiser first to pay attention to the business processes (intangible assets) underpinning reputation.

It is said of war that it has no winners, only survivors. Research in Motion out survived Steve Jobs. It is not winning.

Weekly Reputation Index Metrics

At the close of trading 6 Oct 2011, the RepuStars® Variety and Repustars Prime Composite Indices stood at 226.08 and 192.05 respectively. Over the past four weeks, the former Index has decreased by 5.86%, while the latter has decreased by 3.61%. The benchmark S&P500 Composite Index stood at 103.76 (5 April 2002=100) and has decreased over the past four weeks by 1.76%.

Over the trailing twelve months, the RepuStars Variety and Prime Composite Indices have, respectively, gained 3.11% and lost 1.05%; the S&P500 Composite Index has lost 0.6%. Since January 2009, the RepuStars Variety and RepuStars Prime Composite Indices have gained 78.36% and 72.74% respectively; the S&P 500 Composite Index has gained 25.02%. Other interval changes in the magnitude of the indices are shown below.


The RepuStars® family of composite indices represent a strategy of reputation arbitrage and reflect the added value of reputation resilience. The RepuStars® Prime Composite Index comprises no more than one firm in each of 20 major sectors with the greatest potential for reputation-linked equity appreciation sampled from the large-cap segment of the U.S. equities market. The RepuStars Variety Composite Index comprises no more than 3 firms in each of 19 major commercial sectors. The benchmark metric is the S&P 500® Composite Index.

The RepuStars indices are reconstituted annually in the first week of January. The Indices were last reconstituted 6 Jan 2011.  Click here for additional information on the indices.

Reputation, Risk and Finance

Reputation management through superior control of a company's intangible assets may be one of the best paths to value creation today. If it is not on your agenda, perhaps it should be. Here are several things you can do right now to start creating value for your organization:

1. Become better informed. Participate in our regular Mission Intangible Monthly Briefings held on the first Friday of every month or read the book, Mission: Intangible. Managing risk and reputation to create enterprise value, available at the IAFS Store or other leading online book retailers. 
2. Become a member of the Intangible Asset Finance Society and engage.
3. Join our community on Linked-In and stay in the information flow. 

REPUSTARS is a registered trademark used under license.

Reputation is a consequence of corporate behavior that motivates stakeholders to behave in ways that either reward or punish the corporation. This is how.

Reputation is a stakeholder’s expectation of behavior. Stakeholders include customers, vendors, employees, creditors, equity investors, and regulators. Reputation is an expectation stakeholders form based on how a company manages six key areas of business: ethics, innovation, quality, safety, sustainability, and security.

Reputation also drives stakeholders’ behavior. In the glow of a superior corporate reputation, customers are more willing to accept higher prices, vendors and employees offer better terms for their services, creditors and equity investors offer better terms for capital, and regulators tend to be more forgiving. These are all value-creating behaviors. And they are not present in Eastman Kodak's (NYSE:EK) stakeholders.

Excluding the momentary surge of optimism associated with the prospects of wholesale intellectual property monetization, Kodak's key reputation metrics have been steadily working their way down. As the Steel City Re Corporate Reputation Index shows, over the trailing twelve months, Kodak's index ranking slipped from the 12th percentile to the bottom among the 29 peers in the Electronics/Appliances sector. Reflecting the slow and steady decline, the exponentially weighted moving average volatility has only been 7.5%. More recently, over the trailing 12 weeks, the reputation velocity has been -7% and the reputation vector has been -32.6%. Last the economic return has been 40.4% lower than the median of its peer group.

Looking at the sector as a whole, the mean reputational values and spreads have been largely the same over the past year. As to Kodak's balance sheet, the intangible fraction is now at nearly 450% indicating an unsustainable level of debt.

As a group, stakeholders appear to have thrown in the towel. There are no expectations.

Weekly Reputation Index Metrics

At the close of trading 29 Sep 2011, the RepuStars® Variety and Repustars Prime Composite Indices stood at 227.41 and 191.96 respectively. Over the past four weeks, the former Index has decreased by 6.26%, while the latter has decreased by 4.72%. The benchmark S&P500 Composite Index stood at 103.36 (5 April 2002=100) and has decreased over the past four weeks by 3.65%.

Over the trailing twelve months, the RepuStars Variety and Prime Composite Indices have, respectively, gained 4.75% and lost 0.41%; the S&P500 Composite Index has gained 1.24%. Since January 2009, the RepuStars Variety and RepuStars Prime Composite Indices have gained 79.41% and 72.67% respectively; the S&P 500 Composite Index has gained 24.53%. Other interval changes in the magnitude of the indices are shown below.


The RepuStars® family of composite indices represent a strategy of reputation arbitrage and reflect the added value of reputation resilience. The RepuStars® Prime Composite Index comprises no more than one firm in each of 20 major sectors with the greatest potential for reputation-linked equity appreciation sampled from the large-cap segment of the U.S. equities market. The RepuStars Variety Composite Index comprises no more than 3 firms in each of 19 major commercial sectors. The benchmark metric is the S&P 500® Composite Index.

The RepuStars indices are reconstituted annually in the first week of January. The Indices were last reconstituted 6 Jan 2011.  Click here for additional information on the indices.

Reputation, Risk and Finance

Reputation management through superior control of a company's intangible assets may be one of the best paths to value creation today. If it is not on your agenda, perhaps it should be. Here are several things you can do right now to start creating value for your organization:

1. Become better informed. Participate in our regular Mission Intangible Monthly Briefings held on the first Friday of every month or read the book, Mission: Intangible. Managing risk and reputation to create enterprise value, available at the IAFS Store or other leading online book retailers. 
2. Become a member of the Intangible Asset Finance Society and engage.
3. Join our community on Linked-In and stay in the information flow. 

REPUSTARS is a registered trademark used under license.