Art & Commerce: Ultimate Irony | Adweek Art & Commerce: Ultimate Irony | Adweek
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Art & Commerce: Ultimate Irony

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Adweek
Editor, New England Edition
While Arnold's "stock" reaches new heights, parent Snyder stumbles down Wall Street
There's a lot of celebrating going on at Arnold Communications these days. The prestigious One Show for Art and Copy includes the Boston-based agency's work in an exhibit devoted to a single advertiser, Volkswagen. The show, now open at the One Show Gallery in Manhattan, features Arnold's New Beetle work dispersed among vintage Beetle ads from the legendary Doyle Dane Bernbach. The best advertising of the '60s alongside the best advertising of the '90s--Arnold chief creative officer Ron Lawner must be walking on air.
Add this creative recognition to the agency's mind-boggling new-business success (Royal Caribbean Cruise Line, PNC Bank, MyWay.com and the national anti-smoking contract added more than $200 million in billings in just a six-week period) and you've got some happy campers over at Arnold HQ.
There's just one glitch.
While Arnold's "stock" is at an all-time high, the stock price of parent company Snyder Communications has been sinking to its all-time low.
Despite Arnold's best performance, Snyder's share price has continued to drop since April 1998, when the Bethesda, Md.-based firm bought the agency in a pure stock deal valued at $120 million. Since that time, Snyder's stock has somehow sunk from a high of 44 to a low of 11 3/4. At market close last Thursday, Snyder was down 7/8 to 13 11/16. At today's trading price, the value of Arnold chairman Ed Eskandarian's initial shares alone has decreased by about $50 million.
So why hasn't the success of Snyder's largest holdings translated into Wall Street winnings? Snyder's chairman, 34-year-old Daniel Snyder, believes it's because his miniconglomerate is confusing to investors.
Aside from fulfilling an apparent boyhood dream of owning the Washington Redskins, Daniel Snyder has made a number of financial maneuvers to improve his company's value to its shareholders and more clearly define its places of business.
As a result, Snyder Communications has divided itself into three separate entities. There's the core company, Snyder, comprised of creative service units Arnold and Brann, which includes the direct marketing agency formerly called Blau.
In September, Snyder spun off its healthcare-related holdings into a separate entity called Ventiv Health. Its shares began trading on Nasdaq around 9 and last Thursday closed at 7 5/8.
The third entity, Circle.com, is the amalgamation of Snyder's Internet-related companies. Shareholders were scheduled to vote on the "tracking" stock plan for Circle.com. If the vote goes as expected, the company will begin trading today on the New York Stock Exchange, and Snyder's shareholders will begin receiving shares in both Ventiv and Circle.com.
Snyder hopes that the sum of its parts will be greater than the whole. But that would seem to defy logic--kind of like the record-breaking success of a company's largest holding not translating into gains for the parent.