IPG Stock Sinks to 52-Week Low

NEW YORK In trading volume nearly seven times its average, Interpublic Group’s stock on Tuesday dipped as low as $10.05 per share before rebounding slightly to close at $10.51, still a new 52-week low.

Analysts attributed the high-volume activity to IPG’s one-day offer of convertible perpetual preferred stock to institutional investors, which is expected to raise about $600 million.

While the private offering will help IPG cover the payment of client and vendor credits and the rising cost of professional fees, among other anticipated expenses, it also will have a dilutive effect on its stock, given the issuance of 500,000 shares, each of which will be convertible into 70 shares. Hence, some institutional investors sold heavily even while others bought in, a source said.

Tuesday’s trading volume exceeded 19.9 million, compared to an average volume of 2.9 million, according to Yahoo Finance. IPG flagged its private offering in a filing with the Securities and Exchange Commission on Monday, when, in two other filings, it corrected parts of last month’s annual 10-K filing and said it had expanded its pool of lenders from 11 to 12 and increased the amount it can borrow from $450 million to $500 million.

Last month’s 10-K included a whopping $550 million restatement for the period of 2000 to 2004. The latest filing, a 10-K/A, does not change the size of the restatement but does revise certain figures in 2001, such as the net loss to common stockholders that year. Previously, IPG said the loss amounted to $583.1 million; in the new filing, the figure is $610.4 million.

IPG attributed the revisions to the application of a new tax provision in 2001. IPG also corrected typographical errors in its previous 10-K, which was filed Sept. 30. “The amended filing has no impact on [IPG’s] annual financial statements for 2002 through 2004, or on the cumulative impact of the restatement,” IPG said in a statement.

The revisions come less than a month before IPG is to finally hold its annual shareholders meeting. That meeting, usually held in May, is scheduled for Nov. 14.