Regards, Ivan
Posted on 02/19/2005 4:18:13 PM PST by MadIvan
Incarceration has worked a miracle on Martha Stewart's bottom line, restoring the disgraced domestic diva to billionaire status. She has watched her fortunes soar while serving a five-month jail sentence, during which she was forbidden by law to conduct any business.
The 63-year-old homemaking queen will emerge from prison on March 6 more than $500 million (£264 million) richer on paper, after shares in her retail and publishing company soared on the back of a new reality television deal and higher licensing fees.
Shares in Martha Stewart Living Omnimedia slumped as low as $8.25 in May, as she awaited sentencing after her conviction for lying to investigators about a personal stock deal. That prompted headlines such as "Martha Inc can't survive".
Last Friday, however, the shares closed at $34.99, valuing the company at $1.74 billion. Stewart owns just less than 60 per cent, giving her a stake of about $1.02 billion. Goldman Sachs, the securities giant, has become its biggest institutional shareholder, with a seven per cent stake.
On her release from jail, Stewart will spend another five months under house arrest at her new mansion in upstate New York, although under the terms of her probation she can leave the house to work. Plenty is lined up, most notably her own version of The Apprentice, a reality television contest for budding tycoons originally hosted by Donald Trump, the property mogul.
"This country is all about second chances," said Mark Burnett, the programme's producer, who also plans a daily live-audience show with Stewart for NBC in the autumn. "That's what makes it the greatest country in the world. People love redemption stories."
Executives at her company told the New York Times that licensing fees for the daytime show were "trending significantly higher" than those for Stewart's original show, Martha Stewart Living, when her popularity was at its peak.
Stewart's downfall came after she lied about why she sold shares in ImClone Systems in 2001, just before the price plunged. Her reputation had been that of a shrewd businesswoman who wrote off even her coffee as a business expense.
Before entering prison Stewart appointed her daughter, Alexis, to run her stake in the company and swapped her roles as director and chief creative officer to be "founding editorial director".
Like all American inmates, she was not able to conduct business from Alderson, West Virginia, a low-security institution nicknamed Camp Cupcake in her honour. As a result there was some surprise this month when Mr Trump, who turned The Apprentice into a ratings hit with his catch phrase, "You're fired", said that Stewart would be hosting an offshoot.
The star has received monthly visits at Alderson from Mr Burnett but he insists that the deal was completed before she entered prison.
"Mark and I have always admired her," said Mr Trump. "She's a very brave woman. She's built a multi-million-dollar empire. We think this will be an absolutely tremendous success." Stewart is also expected to turn her prison memoir into a book that literary agents predict could earn a further $5 million.
Even so, the picture at her financial empire is not entirely rosy. Scores of employees have lost their jobs and merchandise sales of furnishings, linen and houseware, mainly in Kmart stores, have fallen. The company is expected to post a loss for 2004. Analysts also express concern over the flagship Martha Stewart Living magazine, where advertising revenues are poor. Nonetheless, they agree that the company had turned a corner that few predicted last summer.
Famously high-maintenance, Stewart prompted derision after her sentencing when she said that Nelson Mandela, who spent 27 years in jail in apartheid South Africa, would serve as her model for coping with prison.
She has since developed a close interest in penal policy, sending e-mails to the Wall Street Journal criticising a controversial change in judicial sentencing rules. She has also expressed concern about the diet of fellow inmates, persuading the prison authorities to stock fresh yoghurt alongside chocolate bars in the vending machines, according to her friend Barbara Walters, the television interviewer.
Ms Walters, who visited her recently, said Stewart had lost 20lb, was in "good spirits", had made friends with prisoners and taught yoga classes.
Less flattering versions of her time inside have emerged in letters sent to a New York tabloid newspaper by inmates. One claimed that Stewart had been disciplined for smuggling food from the kitchen in her underwear so she could spice up meals she prepared for herself in a microwave.
Stewart will make a fresh start at her home in Bedford, New York. Her priority, she has told friends, is to plant her spring garden. Resurrecting her public image and reviving her brand will not be far behind.
Regards, Ivan
Ping!
I really liked her Food Network show. More than any other show/host, I'd find myself saying, "That looks good - I want to try that!" (referring to the food) I hope it returns when she gets out of the slammer.
I'm probably in the minority here, but I like martha and think she got screwed. I bought in for stock at $10 a share before the trial started and have reaped a hefty windfall. Martha did a good job for me. With all the grotesque tv shows on daytime TV I think her show was comparitely tastefull. she brought good taste to a lot of people that had none. I hope she does well when she gets out of the pokey.
Gosh, I wouldn't mind going to jail and having the same result.
I wonder if the government is saying "We sure taught her a lesson". Kind of neat to see the government get the short end of the stick on this one.
I agree with you. Wish I'd been smart enough to buy stock, too!
I not sure you're in the minority here. Martha was jailed for "Crime Against the Government" and nothing else.
Well, you have to put this into perspective. She's much worse off than before the government entered her life. She's just better off than she was when she went to jail, financially that is.
It must really burn the biscuits of the government that she has been running her business from inside the "prison".
Her "on paper" riches will grow. I would predict she will simply raise her daughter to be a surrogate for her business. She will not allow the rules of her conviction hamper her control.
Say, "Can you hire a publicity firm" so you can be a crook and make a lot of money.
I still say Martha Stewart was stockbroker and knew the rules. It's too bad other things got in the way of her punishment.
I'm with you. I think most folks are just intimidated by her. I can't and don't want to make most of things she shows but there are the occasional "I can do that" moments. She has never bothered me. My Mom isn't a fan. But I'm much more of a "crafty" person than my mom. That may have something to do with it.
The government doesn't care. She served her purpose as the main scapegoat for the bad economy during the 2002 midterm elections. After the elections it looked like she might escape prosecution, but I guess that would have looked to obvious.
The Jury convicted stewart for exposing herself as the b*tch that she is.
She convicted herself, she should have lawyered up fast and kept her mouth shut.
Ahhhh... 500+ million dollars in the value of her stock, America what a country! and free market capitalism, what a system!!
I wish I had bought her stock too.
I wonder if she will still be a Democrat. I guess she is a convicted felon now.
Too bad. I'd like to see a reality show with her running for NY governor against Spitzer!
LoL....
She's a comedian without a clue..
Mandela then proceeded to reduce South Africa to Ghetto status..
Then to what is now.. sub-Ghetto status..
I agree.
Human nature I guess. Martha was a self made success, who made a mistake thinking she ALWAYS knew best, even in areas where she had NO expertise. Doctors, police officers and teachers often have the same quality. (no pings please, thats from an old joke re:construction work.)
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