Congratulations WPP – your share price has recovered to its 2001 level
It may seem hard to believe, but today we celebrate the resurgence of WPP’s share price to the level at which it stood 10 years ago – on 12 January 2001 or thereabouts. Yes, it’s a fact. WPP’s share price has remained depressed for a whole decade.
Any reasonable investor would have hoped to see some capital appreciation in that period. That being the case, some consolation may be drawn from the fact that the FTSE All-Share Index has not performed much better, adding only 5.7% to its value in the same period.
However, the lack of much upside potential must be a concern for every marcoms company that might otherwise regard a stock market listing as a helpful way to realise some capital for hard working founding executives while retaining an element of control over their company’s destiny.
Of the marcoms companies that were listed on the stock exchange in January 2001, just three are able to show any improvement in their share price today. In addition to WPP, they are Aegis Group and Creston. Only Aegis can claim a 10% price growth in the decade and that’s not enough to justify the investment over the period. Among the latecomers, only shares in M&C Saatchi, Motivcom and Progressive Digital Media have added value since arrival.
That leaves 18 companies that have either lost value or failed completely in the decade – evidence if ever it was needed that the industry has so far failed to deliver a reliable model for achieving sustainable value growth beyond the first flush of youthful ambition that expires when founders cash in their shares. And that must have something to do with the fact that few, if any, entrepreneurs in the industry have the desire to do so. A sobering thought.
Bob Willott is editor of “Marketing Services Financial Intelligence” at www.fintellect.com.