“They seem to have lost control of the business – this is a case study in bad management,” opined an Interpublic Group shareholder of more than twenty years standing, following Thursday’s revelation of yet more problems within the world’s second largest advertising group [WAMN: 17-Oct-02] .

The damning verdict was passed by Scott Black of Delphi Management which owns over 350,000 shares, who added: “It’s a shame because this was one of the great, great companies.”

The market at large evidently shares Black’s view. At close of the NYSE 5pm Thursday, Interpublic shares had lost 29.82% of their value to stand at $11.44 (€11.79; £7.41), having recovered from a day-low of $9.85 This compares with their 52-week high of $34.98 on 10-Apr-02.

The entrail-rakers are unsure at whom to point the finger. Some indict current ceo John J Dooner Jnr (in the driving seat since January 2001) and chief financial officer Sean F Orr; others accuse Dooner’s predecessor Philip H Geier and his cfo Eugene Beard, both of whom presided over acquisitions that have since gone bad – Octagon Sports Marketing is one example.

Conversely, investor Black believes that the ancien régime imposed tighter financial controls than at present, although David A Katz, chief investment officer at former shareholder Matrix Asset Advisors is less certain.

“At the moment, we're willing to give the new management the benefit of the doubt,” says Katz. “Nobody thought there'd be a restatement of any magnitude, but apparently the problems were deeper than we thought. It's frustrating, but I don't think there's a smoking gun there.”

Others point out that IPG’s latest crop of horrors stem from the European operations of McCann-Erickson where a number of expenses had been accounted for in irregular fashion. They also note that prior to assuming the role of IPG ceo, McCann was Dooner’s fiefdom.

Dooner is remaining prudently silent.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff