Criminal Charges for Martha?
By LouAnn Lofton (TMF Bling)
June 3, 2003
Shares of Martha Stewart Living Omnimedia (NYSE: MSO) are down 18% today after the company issued a statement indicating that its namesake is the target of a criminal investigation and will soon be indicted by a grand jury. The SEC is also still pursuing its civil actions against Stewart. Her lead lawyer said she'll plead innocent and go to trial if indicted. In addition, Stewart may resign her positions as chairman and CEO as early as Wednesday, according to CNBC.
And so goes the ongoing saga of the crafty businesswoman whom America loves to hate. If anything, you gotta give Martha credit for providing the country with an interesting diversion from terrorist warnings, war with Iraq, SARS, and all those tacky Michael Jackson "documentaries."
But Martha Stewart Living Omnimedia continues to keep its place in the Motley Fool Stock Advisor, because although the business has been feeling some pain due to its famous maven's messes, it's still on solid footing. The company carries no debt and has a chunk of cash.
Yes, total revenues were down about 15% and publishing revenues were off 20% in the most recent quarter, but that doesn't mean that the company's going to be out of favor forever. David Gardner picked Martha for the November issue, and he still believes it's priced cheaply today. Focusing on one's personal distaste for Martha herself may lead investors away from a promising opportunity.
We'll have to keep watching for what happens next in the story that increasingly looks like a bad TV movie of the week. Oh wait, this already was a bad TV movie of the week. Regardless, Martha makes the markets more fun to follow.
Want to know what other stocks have helped David Gardner return 50.74% since April of last year, vs. the S&P 500's 3.81%? Subscribe to Motley Fool Stock Advisor.
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