Agency Stocks Spiral Downward

Agency holding companies were not exempt from the drubbing most industry sectors experienced in the volatile stock market last week.

On Sept. 17, the first day back after the market’s record closure, major agency networks lost a greater percentage than the 7.1 percent decline sustained by the Dow Jones Industrial Average. At Friday’s close, the Dow was down 14 percent from Sept. 10, the day before the terrorist attacks.

Of the big three networks, WPP took the biggest hit. Its stock closed Friday at $37, down 22 percent from Sept. 10. IPG, which closed at $21.08, was down 16 percent. Omnicom’s stock fell to $60.12, down 18 percent.

Cordiant’s value tanked 41 percent with a share price of $6.75 on Friday. Publicis was down 20 percent from Sept. 10, with its stock trading at $16.90. Havas, which trades on Nasdaq, closed at $6.05, down 21 percent.

Put in personal terms, top stockholders in the holding companies lost millions. Based on figures from proxy statements filed last spring, stock and options owned by Phil Geier, chairman emeritus of the Interpublic Group of Cos., sunk from $39.9 million on Sept. 10 to $33.4 million last Friday. Omnicom chief executive officer John Wren lost$22 million in stock and options that had been worth $122.6 million. And Michael Dolan of Young & Rubicam saw his $188.1 million in WPP stock and options drop by $42 million.

With President Bush’s Thursday night ultimatum to Afghanistan, many last week predicted greater declines for the economy and these marketing-services companies. One who did not was Lauren Rich Fine of Merrill Lynch in New York.

“Holding companies are sodiversified in geography and clients that they will find opportunitiesfor growth and will improve,” Rich Fine said.