Mitt Romney vouched for low price on Staples stock that traded 10 times higher a year later

Boston Globe ^ | 10/25/2012 6:23 PM | Callum Borchers

[Red Steel]

CANTON, Mass. — Mitt Romney testified under oath in 1991 that the ex-wife of Staples founder Tom Stemberg got a fair deal in the couple’s 1988 divorce, even though the company shares Maureen Sullivan Stemberg received were valued at a tenth of Staples’ stock price on the day of its initial public offering only a year later.

At the time the Stembergs split, Romney suggested, there was little indication that Staples’ value would soon skyrocket.

Romney’s testimony in a post-divorce lawsuit brought in 1990 by Sullivan Stemberg was unsealed on Thursday in Norfolk Probate and Family Court at the Globe’s request. Sullivan Stemberg sued unsuccessfully to amend the couple’s financial agreement after Staples went public in 1989 and closed its first day of trading at $22.50 per share, 10 times the value she had received.

Stemberg left his wife in February 1987, and the divorce was finalized in July 1988. Before the official split, the couple negotiated an agreement in which Sullivan Stemberg got 500,000 shares of Staples stock, which Stemberg valued at $2.25 per share.

Sullivan Stemberg also kept the couple’s Dedham home, worth $690,000 at the time, and in February 1988 sold 175,000 shares of Staples stock at $2.25 per share to pay off the mortgage. She sold another 80,000 shares two months later, at $2.48 per share.

“In my opinion, that’s a good price to sell the securities at,” Romney, now the Republican nominee for president, testified in June 1991.

[classified]

I agree. He didn’t advise her to sell her stock before it went up. She chose to do so. The price of the stock at the time of the divorce was probably not worth much. Romney probably hoped that the stock would be worth more in a year especially if he was owning any shares but to say that he influenced the outcome of her situation in reference to the stock seems a stretch. She chose to sell and loss out on a super windfall!

[catnipman]

Check out the online comments at the end of this article. The Boston Globe has been universally scorned for this garbage, and their obvious hyperpartisan Obama proactiveness, as opposed to their ridiculous claim of being a part of the “objective news media” that simply reports the news.

Though I’m sure the reservoir of subscribers willing to cancel their Boston Globe subscriptions has shrunk to an all time low with most of their remaining subscribers in the hard left camp, I bet they STILL get a few more subscriptions cancellations over this one!

[opentalk]

She made the choice to sell her shares. The Globe somehow is trying to connect Romney to her bad choice. Wonder if she is gaining financially for being part of this current media charade.

[Maurice Tift]

  I think this helps Romney. I'm not a fan of liberal Republicans, but even I see him a bit more favorably knowing that this is all she can come up with. Sadly for her, she has to return to Hades without earning that pitchfork she wanted so badly.

[BlessingsofLiberty]

If this divorce occurred in 1988, Staples stock didn’t go public until 1989. In 1988, Staples was expanding and needed to solicit three more rounds of financing from the investment banking community, raising a total of $32 million.

Trying to value a company’s stock at this stage would have been a little sketchy because most of the valuation would have been tied up in venture capital. Obviously, the company was cash strapped.

http://www.fundinguniverse.com/company-histories/staples-inc-history/

Thank you freeper rollin_stone for this information.

[SueRae]

In my best Breitbart tribute...”so?”

[rolling_stone]

this is a crock the ex wife also sued her supposed atty saying they advised her to sell the stock to pay her atty fees...also i read Romney was asked if he exercised all the options he had to buy the stock and he said no it could fail as easily as go sky high..

the woman involved is no newcomer to bitterness...IIRC she was also sued for defamation by her ex and his new wife...

Allred apparently failed to investigate her client and consider her credibility..either that or she didnt care just wanted to make news...

[Raycpa]

http://www.fundinguniverse.com/company-histories/staples-inc-history/

In February 1989 Staples introduced its Private Label products—generic office supplies at exceptionally low prices. This strategy was one that Stemberg had first implemented in the grocery business, when he introduced company-label groceries for Star Markets. In April Staples sold stock to the public for the first time, raising $37 million to fund its further expansion. By the end of that month, the company’s sales had reached $120 million. Despite this strong growth in revenue, Staples had yet to make any earnings, although the company did turn in its first profitable quarter at the end of January 1989. Overall, losses since Staples’ founding had reached $14.1 million.

These losses were caused by the high cost of the company’s start-up and expansion as well as the strong competition the company faced. As Stemberg had predicted, Staples had quickly been joined in the office supplies market by a host of imitators around the country. In mid-1989 the company slipped to second place in revenues behind Office Depot Incorporated; Office Club was making a strong showing in California; and retail giants Kmart and Ames were also deliberating a move into the stationery field. To counter these threats, Staples continued its rapid pace of new store openings. By the end of the year the company was operating 38 stores, and it had racked up sales of $182 million.

[outofstyle]

Now Allred is blaming Romney. Of ourse the media will love this.

Agreed. And though I don't have much faith in "the electorate" I'm pretty sure, they will yawn.

[Ronin]

That was my thinking. If Mitt had quoted a higher value for the stock, she would have gotten LESS stock because the targeted value payout value would have been reached at that “presumed” share price.

In other words, he did her a favor by quoting a lower price and thus making sure she got more shares.

Nobody told her to sell off those shares early. She could have very easily held on to them and made ten times as much. She didn’t. Tough cookies, that’s the way the market works.

If anyone has a cause to bitch it’s her husband, who was “screwed” by Mitt because he ended up giving her far more shares than she would have otherwise gotten if he had quoted a higher price.

So tell me, what exactly, is she bitching about?

[USNBandit]

She blew 80% of her settlement fighting for more and defending herself from a defamation lawsuit. I haven’t heard the results of that defamation lawsuit.

[rolling_stone]

http://www.boston.com/yourlife/relationships/articles/2005/11/13/ladies_man/?page=full

see post 147 thanks to maggief:

http://www.freerepublic.com/focus/news/2949409/posts?page=147#147

[opentalk]

One of the many comments at the link, this is backfiring on the Globe:

--Did the globe ever ask for Elizabeth Warren's employment applications -or how about digging up the paper work from her first divorce ?--

[cpdiii]

I could be wrong, but would any kind of revelation to price, or advance knowledge of an increase in it’s valuation, be akin to insider trading??? I think Romney would be in deeper s**t if he actually did if he actually did make any kind of claim of an increase in value.

New Member of Free Republic in September of 2012.

This member is a troll.

Mods, please give the BIG ZOTT to this troll.

[tang-soo]

This is my shocked look!

[murron]

I wish this was like FaceBook where you could hit Like. I love that little baby.

[Boogieman]

Thanks, Democrats, for letting America know that Mitt Romney can’t predict stock prices in the future. I doubt he ever claimed to have that psychic ability, but I guess it’s good for us to know his limitations. We wouldn’t want to elect him President thinking that he would do stuff like lower the Earth’s temperature, make Muslims love us, and erase everyone’s mortgage debt, only to find out later that he couldn’t deliver on our expectations.

[proudCArepublican]

This is so dumb it seems like she got the fair share back at the time of the divorce and than it sky rocketed up later on why should she get more that was not the value at the time of the divorce.

Like we all have found out that have stock it goes up and down, and up and down.

I guess Mitt was to have a crystal ball and say in a year it will go 10 x times how would he know this.. no story. If she was smart she would have held onto it and watch for the value to increase and than sold the stock but what do I know I am a dumb middle class, bitter clinger

[txrefugee]

So exactly what did this harpy do to earn over 5 mil, which 24 years ago, before Bernanke gutted our dollar, was a healthy chunk of change? Unless she actually had a hand in establishing the business, she got way too much of his money.

Alread should be kicked in her ample a** and told to mind her own business.