Baby has not only put Ms. Martha in her place – he’s cost her a fortune.
Damaging testimony against Martha Stewart from rookie broker Douglas Faneuil, who referred to himself as “Baby” and her as “Ms. Martha” in an e-mail, has helped trigger a slide in her company’s stock price that has so far cost the domestic diva $46 million.
Each day that the one-time corporate golden girl sits at the defendant’s table in Manhattan federal court facing obstruction charges, an average of almost $5 million slips through her fingers, an analysis of her stock chart shows.
Stewart owns just over 30 million shares in her good-living media empire, so every time the stock goes down 1 cent, her wealth drops by $300,000.
Faneuil, the government’s star witness, testified that Stewart branded him a “little s- – -” and an “idiot” in their first phone conversations, leading him to proudly snap in an e-mail note to his boyfriend: “Martha yelled at me again today, but I snapped in her face, and she actually backed down. Baby put Ms. Martha in her place!!!”
Wall Street guessed Stewart was headed for trouble when she sauntered into court with her Hermes handbag for opening arguments Jan. 27 – by the end of the day, Stewart’s stock had fallen 41 cents, costing her $12 million.
But the government’s spluttering start to the trial gave Stewart’s stock a brief boost, sending it from $12.65 a share to $13.06 a share over two days.
As the government’s witnesses got into stride, however, Stewart’s company stock began a steady slide down to Friday’s close of $11.68.
On the evening before Faneuil took the stand Feb. 3, Stewart’s slice of Martha Stewart Living stood at almost $390 million.
Five trading days later, after America had heard of Stewart’s “secret tip” – and Faneuil’s penchant for calling himself “Baby” in e-mails to pals – the domestic diva’s fortune had taken a $24.6 million wallop.
Ann Armstrong, Stewart’s faithful assistant, also didn’t do much for her boss’s bank account.
On the day that she told jurors how Stewart changed a critical telephone message from her broker, the princess of perfection parted with the best part of $7 million.
Stewart’s trial will resume tomorrow, with the government planning to wrap up its case against her and stockbroker Peter Bacanovic this week.
They are each standing trial on five federal charges alleging that they conspired and obstructed the government’s investigation into Stewart’s sale of almost 4,000 ImClone shares on Dec. 27, 2001 – just before the FDA blocked the approval of the company’s anti-cancer drug, which caused the stock to eventually plummet.
Analysts have said that if Stewart is cleared, it could boost her company’s stock, at least initially. Even if she’s found guilty, investors could expect a market jump in the stock, albeit short-lived, as long as she can dodge prison, some said.
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How the trading prices of Martha Stewart’s Omnimedia has fluctuated day-by-day since her trial startedJan 26 close – the night before opening arguments. That price was $13.25
Jan 27: Opening arguments delivered. $12.84
Feb. 3: Rookie broker Faneuil begins bombshell testimony. $12.50
Feb. 9: Stewart assistant Ann Armstrong cries as she begins devestating testimony. $12.08
Feb. 10: Armstrong says Stewart changed critical telephone message from stockbroker Peter Bacanovic. $11.85
Feb. 13: Stewart’s lawyers question accuracy of FBI agent’s notes. $11.68