Shares Recover at Martha Stewart Firm as Bad News Dries Up

11 December 2002

No news is seemingly good news at Martha Stewart Living Omnimedia, which appears to be recovering from the damage caused by the scandal surrounding its founder, US homemaking guru Martha Stewart.

Shares in the media group have climbed 47% since late October, as claims of insider trading by Stewart have died down in the press.

The heroine of wholesomeness is alleged to have sold nearly 4,000 shares in biotech company ImClone after receiving a top level tip-off the day before one of the firm’s drugs was denied regulatory approval.

As federal authorities began to probe her role in the affair, MSLO’s performance suffered and its shares plummeted by over 50% [WAMN: 04-Nov-02].

However, some investors believe the investigation has stalled and is unlikely to result in criminal charges (though the Securities & Exchange Commission is pushing for a civil suit). Moreover, consumers have continued to buy MSLO publications and products.

Share prices have consequently begun to claw back lost ground, though still only around half their 52-week high of $20.93 (€20.71; £13.29), posted on March 18.

Data sourced from: International Herald Tribune; additional content by WARC staff