Hedge funds bet against WPP amidst expectation of further share price falls

By John Glenday | Reporter



WPP article

June 25, 2018 | 3 min read

Uncertainty at the top of WPP in the wake of Sir Martin Sorrell’s abrupt departure from the agency network he built over three decades has seen a surge in the number of investors betting against the advertising giant.

According to a report in The Times, the percentage of WPP shares on loan has risen from a negligible amount to close to 6% of its share capital in that time according to analysis by IHS Markit, with the number of WPP shares on loan rising just as the wider FTSE100 experiences a decline in such trades.

This process of ‘shorting’ or 'short selling’ sees investors borrow shares for a fee and selling them on with the intention of subsequently buying them back more cheaply at a later date and handing the shares back to their original owner.

WPP acquires Y&R and Wunderman to strengthen its pan-Asia hold

Hedge funds turn on WPP amidst expectation of further share price falls / WPP

It is estimated that there are now around 81m WPP shares on loan, equivalent to around £1bn based on its current share price with Marshall Wace and Old Mutual Global Investors amongst those actively shorting the ad giant.

WPP has seen its market value slashed by £5.6bn over the past year as it is buffeted by the perfect storm of Sorrell’s exit, a wider advertising downturn and increased competition from the likes of Google and Facebook.

The latest marketing news and insights straight to your inbox.

Get the best of The Drum by choosing from a series of great email briefings, whether that’s daily news, weekly recaps or deep dives into media or creativity.

Sign up

Last week, Sorrell told The Drum at an exclusive event in Cannes that the long-term succession plan was for the current chief operating officers Mark Read and Andrew Scott to take the reigns, a plan he still supports.

Sorrell heaped further pressure on his own creation last month when he announced plans to form a new global communications firm called S4 Capital, with heavy backing from institutional investors.


Content created with:

More from Advertising

View all


Industry insights

View all
Add your own content +