comScore Stock Sinks 35%, 'Accounting Matters' Blamed
- by Wayne Friedman , March 7, 2016
The
stock of comScore -- the media measurement company -- was slammed today. The company, according to a SEC filing, was looking into “potential accounting matters."Midday Monday trading had the media measurement company’s stock plunging 35% to $26.52. The company said it will miss the deadline to file its annual report and would suspend its dividend.
Also, the company suspended its $125 million stock buyback program and cancelled its “investor” day on March 16. The company’s audit committee doesn’t expect to complete its internal review of certain potential accounting matters by March 15.
Last year, comScore bought up TV measurement company Rentrak for $732 million -- a deal that closed this past January. Analysts expect the combined company to be a competitor to Nielsen.
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Recently, the company announced that it would begin offering a cross-platform measurement system -- traditional TV, over-the-top (OTT) and mobile and desktop digital viewing -- starting in April, in time for the television upfronts.
Analysts say the product looks to compete with Nielsen and its new Total Audience Measurement service.
In addition, comScore plans to launch a syndicated, cross-platform daily ratings offering in time for the fall TV season.
One of the biggest investors in Rentrak, and a big investor in comScore, is advertising holding company, WPP Group. WPP Group has a 16% stake in the combined company, with an option to grow it to 19.9%.
Middle of this article talks about all comScore's grand plans going forward. That is all beside the point if they have internal control and accounting problems that led them not only to delay filing financial statements (which a CEO or CFO has to certify accurate under Sarbox) but also hoard cash by suspending buyback and dividend. That indicates this is not a trivial one time error, but that someone found something very serious, perhaps going on for awhile. Wonder what the top level folks at WPP think of this, and whether they will take, or have taken, a lead role getting to the bottom of this.