Kellogg (K): Peanut butter turning out to be risky to shareholders?

Posted Jan 18th 2009 6:47AM by Douglas McIntyre
Filed under: Before the Bell, Bad News, Kellogg Co (K), Mattel, Inc (MAT)

Mattel (NYSE: MAT) had trouble with its stock price when lead was found in some of its toys. Now Kellogg (NYSE: K) may have a similar problem. Some of its peanut-based products may be a cause of the spread of a dangerous salmonella. The trouble has been traced to Peanut Corp. of America, a wholesaler and supplier to Kellogg.

Are Kellogg products among those tainted? It is too early to tell, but the fact that it is pulling 16 products off of grocery store shelves may spook shareholders.

Often shareholders consider selling stocks for reasons that are not rational. Since Kellogg is on a list of firms that may have dangerous products, people holding the stock may think it's an unnecessary risk. In the AP story on the deadly outbreak, Kellogg is the only public company mentioned.

The most visible link at the Kellogg website today says "Austin, Famous Amos & Keebler Product Recall."

Fair or not, reasonable or not, Kellogg opens down at the open on Tuesday.

Douglas A. McIntyre is an editor at 247wallst.com.

Tags: inthenews, K, Kellogg, MAT, Mattel, Peanut Corp., recalls, salmonella