WPP Just Suffered Its Worst Stock Drop Since 1999
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WPP suffered the worst stock slump since 1999 after Chief Executive Officer Martin Sorrell slashed the profit outlook and predicted a year of no growth, giving already jittery investors another reminder that the advertising industry is undergoing its most dramatic upheaval in decades.
Long-term earnings growth will be as little as 5 percent and twice that at best, compared with a prediction of as much as 15 percent previously. The year got off to a “slow start,” WPP said, continuing a trend from 2017 that saw flat margins and sales. Investors responded by pushing the shares down as much as 15 percent, briefly prompting a stock suspension.
“There’s a real sense of shock and awe at what’s happened to his business model,” said Alex DeGroote, media analyst at Cenkos Securities. “This is a stark reminder of the significant challenges WPP faces.”
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