The upgrade of its stock by JP Morgan made it look like Interpublic's suddenly bargain stock was just as suddenly worth buying.
Interpublic shares rose 20.5% to close at $16.15, following the upgrade by analyst Fred Searby, who raised his rating on the advertising giant to a "buy" from "long-term buy". He said that despite the uncertainty surrounding the advertising recovery, Interpublic's valuation is a compelling one and its lawsuit troubles over "accounting concerns are overblown".
Shares in Interpublic fell 23.8% on Monday to $14.99, a drop of $4.69, when it announced that it would delay its second-quarter earnings report by a week. Its stock had continued to lose ground on Tuesday before finally showing recovery yesterday.
In a statement, the John Dooner-led company said that the audit committee of its board of directors "postponed its regular meeting, which was to have taken place today [Monday August 5], until Monday August 12, so it could complete its review prior to management certification of its financial statements."
Under a new Securities & Exchange Commission rule, chief executives and chief financial officers of the US's top publicly quoted companies must certify the accuracy of their financial statements. The deadline for this certification is August 14, two days before the rescheduled Interpublic announcement.
The announcement made US investors react dramatically, causing the share price to plunge. Interpublic has declined to comment further on the reason for the delay in the release of its quarterly results.
According to reports, the reason behind the delay could be a dispute between CEO Dooner and chief financial officer Sean Orr, or it could relate to a non-cash charge running into tens of millions of dollars.
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