ote to his cli- ents." The note was picked up by the Bloomberg newswire, and the games began. Our strategy had been to emphasize three points: Mandl was leav- ing for an outrageous amount of money, his resignation would not affect the company in any way, and we would begin an external search to replace him as chief operating officer. Grubman, whom Institu- tional Investor magazine perennially ranked as the number one or two telecom analyst, wrote that Mandl's resignation could cause "major management disruption" and "may be an indication of deeper issues within AT&T." He concluded, "Needless to say, we remain cautious on the stock." AT&T stock dropped like a stone as soon as the opening bell rang on the New York Stock Exchange. Mandl had already left the building to begin a media tour with his new PR representatives. By the time we caught up with him by phone, he swore that he had not told Grubman about his decision to leave. Considering how close the two were, that was hard to believe. As CFO, Mandl had entertained Grubman at his homes in New Jersey and out- side Washington, D.C. They regularly traded industry gossip, and we suspected that Mandl had fed Grubman backdoor information about AT&T. In any case, by early afternoon, Grubman issued a second note, suggesting that his initial assessment might have been overly nega- tive. But the damage had been done. We were successful in focusing the media's attention on Mandl's new compensation package. That was like pushing through an open door-the media love to write about what people make. But we were not able to defuse the impact of the Grubman-incited stock decline, which became a big part of the story. Our protests that "nothing will change" were rebutted by a 2.5 percent drop in our share price on extremely heavy volume. The combination of the surprise announcement, Grubman's negative analysis of its sig- nificance, and especially the absence of any moderating comments caused investors who were on the fence to put in sell orders before the markets opened for trad