PPP KINGDOM

PPP KINGDOM

IS MARTHA STEWART’S EMPIRE HEADED FOR SALE?

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This is a fascinating story. It has a lot to say about boards and the interaction of boards and companies that are built around a personality.

MSLO has been profitable in only one of the past eight years, losing a total of $185 million during the same period. In the fourth quarter of last year, on the verge of violating loan covenants, the company had to renegotiate its debt with Bank of America. Operationally, the company faces significant problems, too. Stewart’s daily television-programming block on the Hallmark Channel has scored such disappointing ratings that it was cut from eight hours to five. The company has struggled to replace the revenue it used to enjoy through its licensing partnership with Kmart, and it has failed altogether to build a commercially significant digital business. Its stock price has languished below $5 for most of the past year (and at press time was $4.07). Last week, a Wall Street analyst slashed his valuation of the company’s assets by 10 percent.

http://nymag.com/news/features/martha-stewart-2011-8/

Best Regards,

FINANCIAL WARRIOR

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