The findings of this study indicate that firms with rumors about their new product introductions generate superior stock returns over the rumor-to-news period, even when controlling against competitor benchmark in addition to the risk-free benchmark. Furthermore, it is found that the rumors generate a positive stock market impact for the rumored firm and negative impact for competitors. These findings imply that the financial market incorporates the rumors related to new product introductions to the valuation of the firms in the industry. Based on the findings, rumors appear to have an effective function towards the market valuation of the firm. Furthermore, findings regarding intentional rumors support the notion that they can act as a part of audience- focused and result-driven communication program that can enhance future cash flows of the firm (resulting the improvement in firm valuation) that follows the definition of IMC by Kliatcho (2005). The findings therefore exhort that when communicating new product introductions, rumor management should be included in the IMC toolkit. This is a consideration previously neglected in the IMC literature.

• Iiro Vaniala(Aalto University School of Business, Finland)