Share price of Martin Sorrell’s S4 Capital slumps again after auditor delay

theguardian.com:

The share price of Sir Martin Sorrell’s advertising business S4 Capital has slumped further after a surprise delay from its auditors caused the postponement of financial results and a dive in the company’s valuation.

S4 Capital’s share price dropped by 36% on Wednesday afternoon after it announced the delay by auditors PwC without outlining a reason. On Thursday morning it dropped by a further 4.2% to its lowest point since June 2020, at 298p.

The company said it had received notice “at 2:30pm” on Wednesday from its auditors, PwC that “they were unable to complete the work necessary forS4 Capital to release the preliminary statement tomorrow morning”.

Sorrell started S4 in May 2018, only weeks after he was ousted as chief executive of WPP, the company that he transformed from a shopping basket manufacturer into a FTSE 100 advertising and marketing agency. His departure followed allegations of personal misconduct, which he has always strenuously denied, and he left without having to go through a non-compete period.

Since then Sorrell has built up S4 through near-incessant dealmaking, and its market value reached £4.8bn in September, closing in on the valuations of some FTSE 100 companies as it benefited from the economic rebound from the pandemic.

However, since then itsshare price has fallen back dramatically, and the company’s market value fell by £1bn on Wednesday to £1.7bn. That share price fall has dented Sorrell’s net worth: he owns 10% of the company’s stock, suggesting his worth on paper fell by almost £100m on Wednesday and Thursday alone.

Delayed financial results often prompt investors to sell because of fears that auditors have found problems, although S4 did not offer any update on Thursday morning on why the