Spot on. Regarding step 3. The current share price may already...

Spot on.

Regarding step 3. The current share price may already reflect the market's response to what this bad news is believed to be. Making official announcements may not have such a dramatic effect. Share market seems to do that often. Good news sometimes sees a price remain steady of even drop because it was already factored into the share price and the news simply meets expectations. Conversely, bad news has the opposite effect as speculation is removed and may not be as bad as some thought it could be.

A lot of black magic at play.