Hobson: What's Behind WPP's Share Price Crash?

THE WEEK: Morningstar columnist Rodney Hobson wonders why a company that is still comparatively successful can see its shares dive so dramatically

Rodney Hobson 26 October, 2018 | 1:11PM

WPP New CEO Mark Read

These are anxious times, when a moderately disappointing set of results can have a disproportionate impact on the share price. But is that because investors have had an attack of nerves or is it, as has been suggested on Twitter, a case of traders playing games? The distinction is important, as it affects whether the bull market is genuinely over.

The issue came up when WPP (WPP) shares slumped by 25% at one point on patchy third quarter figures. The worst bit was that the advertising group cut its outlook for sales and profit margin for the rest of this year, citing a slowdown in client spending and structural changes in the industry.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
The Royal Bank of Scotland Group PLC ADR2.43 USD-0.41
WPP PLC574.60 GBX0.10

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.

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