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Martha Stewart Takes Out Full-Page Ad
Aired June 05, 2003 - 13:06 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, ANCHOR: Moving on to the other story that has gripped the nation, as well as Manhattan. Martha Stewart said it again today, this time.
You pick up the "USA Today," of course there's her picture on the cover; not the most flattering picture of all of Martha Stewart. But inside, here's something that Martha Stewart purchased herself to the tune of about $73,000, an open letter from Martha Stewart to those who read it. Once again, professing, "I am innocent." And she says she will fight to clear her name.
Stewart bought the ad in "USA Today," paying, as we said about $73,000. Open letter, as she says. In it, she also calls the criminal charges against her "absolutely baseless. That's just the latest in the Martha Stewart story.
Those charges, conspiracy, obstruction of justice, and securities fraud. They stem from an insider trading scandal involving stock in a company called ImClone. You probably know the basics by now.
Now at the end of the ad, Stewart writes this: "I will do my best to post current information about the case and you'll be able to contact me at this e-mail address: Martha@MarthaTalks.com. There's a web site, too, which we might be able to take you to: MarthaTalks.com. Trimmed in Celadon Green, her favorite color, which will keep you up to date, up to the latest on what Martha Stewart has to say about all this. She, of course, not talking to the media at the moment. We look forward to hearing from her soon.
Stewart formally entered her not guilty plea yesterday in federal court in Manhattan, and she resigned as CEO of the company she founded.
More on the Stewart case now from CNN financial news" correspondent, Allan Chernoff, who was there in front of the courthouse yesterday, reading that indictment, reporting on it on the fly.
A little quieter today, Allan. What's -- with a day's worth of reflection, what are your thoughts?
ALLAN CHERNOFF, CNN CORRESPONDENT: Well, Miles, there is no question that Martha Stewart is taking her case to the public. As you point out, she bought that ad. She also has established a web site, MarthaTalks.com, not only promising to provide updates over there, and inviting the public to send e-mails directly to her. Also, her attorney's statement is on that web site. This is clearly a campaign to build public support for Martha Stewart.
Now some attorneys say this will have absolutely no bearing on the legal situation, but others tell us it actually might help her case.
(BEGIN VIDEO CLIP)
ROBERT HEIM, ATTORNEY: I think this will have an effect on both the government and the court, because the government's really looking for the public interest, to do what's right and what's just. And if there is that type of support for Martha Stewart, even if it's subconsciously, it will affect the government and the type of relief it's seeking from a court.
(END VIDEO CLIP)
CHERNOFF: Prosecutors say they are not bringing these charges because of who Martha Stewart is but exactly because of what she did. And the primary charge is obstruction of justice. The idea, that she tried to prevent investigator from finding out the true nature of her sale of those 4,000 shares of ImClone stock, the day before the Food and Drug Administration gave a thumb's down to the company's cancer drug.
Now, Martha Stewart has resigned, as Miles said, as chief executive of her company, but she remains open the board of directors and is also taking on a new title, chief creative officer. She's also still the top shareholder of the company. So the stock price still very important to her. And by the way, today that stock is up about 2 percent. Yesterday, it was up about 5 percent.
So, Miles, it seems the people who had sold off the stock because of the scandal are already out of the stock.
O'BRIEN: I am still scratching my head over that one. Just quickly, Allan, what's the next step we're going to see? When's her next appearance in court or what is the next legal action we're going to see?
CHERNOFF: Well, a judge was assigned to the case yesterday. So the judge really has to determine exactly what the schedule is going to be. But it's going to be a matter of months, clearly, before they move forward. And the investigation took a year and a half, so we can expect that this, certainly, is not a case that's going to come to court in any time soon.
O'BRIEN: Allan Chernoff, thank you very much. Appreciate your insights, as always.
As Allan just pointed out, while she did resign as CEO of the company. Martha Stewart still going to have a big impact on that company, presumably, the chief creative officer will do just that.
Terry Gaudet joins us now. She is of West Hartford, Connecticut. And she owns some stock in the firm and is a big supporter of Martha Stewart. Ms. Gaudet, good to have you with us, first of all.
TERRY GAUDET, MARTHA STEWART LIVING OMNIMEDIA STOCKHOLDER: Thank you very much.
O'BRIEN: Are you in mourning today?
GAUDET: Certainly not. I'm not real happy that Martha has resigned, but that's the way she has to fight the game. I think she's taking the gloves off and she's going to go for it. She's a feisty lady and she's a brilliant business woman...
O'BRIEN: Is that what you admire about her, feistiness?
GAUDET: No, I admire her taste. I think she's just a great businesswoman. And she's going to fight her game. And she can't do that, really, being the CEO, as I would understand it. So now, look out. She's going to get you.
O'BRIEN: All right. Now, your portfolio -- you have a fair amount of Martha Stewart stock, 6 or 7 percent, I guess of your portfolio, right?
GAUDET: Well, I wouldn't say that's a lot. I don't have a great, big portfolio. Just you know, very small.
O'BRIEN: All right. But you've lost some money.
GAUDET: Sure, I have. But I've lost money on other stock, too. But it will come back. That comes back. You know, I don't consider that a great disaster. I don't think it's been a great economy. But I think Martha Stewart is a winning product.
O'BRIEN: Didn't you find it at all interesting, though, that the securities fraud charge against her was not specifically relating to the ImClone insider trading allegation, but it was the allegation that she lied to people like you about the state of her company by saying everything is fine. Do you feel lied to?
GAUDET: No, I certainly don't. I mean, all of us have answered questions spontaneously. I don't know how the question was asked to her. And I -- no, I don't find any evil in that at all.
O'BRIEN: You don't think she misled stockholders in Martha Stewart Omnimedia like yourself?
GAUDET: I truly don't -- I truly don't think that, being as brilliant as she is -- and she has a wonderful demeanor about her -- that she is evil. I mean, I think that, you know, mistakes are made. Business decisions are made. Sometimes they're right. Sometimes they're wrong. Sometimes things are translated differently than they meant to be spoken.
But, you know, that's life. That's why we have apologies. That's why we have full page ads in papers.
O'BRIEN: Of course, we haven't seen an apology, have we?
GAUDET: Well, you don't know. I mean, the game's not over yet. Martha Stewart has brought good taste to the masses and made it accessible and I think, for that, the woman should be canonized. And...
O'BRIEN: Well, could she perhaps be considered guilty of hubris, maybe?
GAUDET: I'm not really sure.
O'BRIEN: Yes. All right. Terry Gaudet, thank you for your time.
GAUDET: You're very welcome.
O'BRIEN: Wearing your Celadon Green blouse, I noticed.
GAUDET: Yes, thank you.
O'BRIEN: And thank you for being with us. We appreciate it.
GAUDET: You're very welcome.
O'BRIEN: All right. Take care.
Terry Gaudet is a Martha Stewart stockholder, joining us from West Hartford.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired June 5, 2003 - 13:06 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, ANCHOR: Moving on to the other story that has gripped the nation, as well as Manhattan. Martha Stewart said it again today, this time.
You pick up the "USA Today," of course there's her picture on the cover; not the most flattering picture of all of Martha Stewart. But inside, here's something that Martha Stewart purchased herself to the tune of about $73,000, an open letter from Martha Stewart to those who read it. Once again, professing, "I am innocent." And she says she will fight to clear her name.
Stewart bought the ad in "USA Today," paying, as we said about $73,000. Open letter, as she says. In it, she also calls the criminal charges against her "absolutely baseless. That's just the latest in the Martha Stewart story.
Those charges, conspiracy, obstruction of justice, and securities fraud. They stem from an insider trading scandal involving stock in a company called ImClone. You probably know the basics by now.
Now at the end of the ad, Stewart writes this: "I will do my best to post current information about the case and you'll be able to contact me at this e-mail address: Martha@MarthaTalks.com. There's a web site, too, which we might be able to take you to: MarthaTalks.com. Trimmed in Celadon Green, her favorite color, which will keep you up to date, up to the latest on what Martha Stewart has to say about all this. She, of course, not talking to the media at the moment. We look forward to hearing from her soon.
Stewart formally entered her not guilty plea yesterday in federal court in Manhattan, and she resigned as CEO of the company she founded.
More on the Stewart case now from CNN financial news" correspondent, Allan Chernoff, who was there in front of the courthouse yesterday, reading that indictment, reporting on it on the fly.
A little quieter today, Allan. What's -- with a day's worth of reflection, what are your thoughts?
ALLAN CHERNOFF, CNN CORRESPONDENT: Well, Miles, there is no question that Martha Stewart is taking her case to the public. As you point out, she bought that ad. She also has established a web site, MarthaTalks.com, not only promising to provide updates over there, and inviting the public to send e-mails directly to her. Also, her attorney's statement is on that web site. This is clearly a campaign to build public support for Martha Stewart.
Now some attorneys say this will have absolutely no bearing on the legal situation, but others tell us it actually might help her case.
(BEGIN VIDEO CLIP)
ROBERT HEIM, ATTORNEY: I think this will have an effect on both the government and the court, because the government's really looking for the public interest, to do what's right and what's just. And if there is that type of support for Martha Stewart, even if it's subconsciously, it will affect the government and the type of relief it's seeking from a court.
(END VIDEO CLIP)
CHERNOFF: Prosecutors say they are not bringing these charges because of who Martha Stewart is but exactly because of what she did. And the primary charge is obstruction of justice. The idea, that she tried to prevent investigator from finding out the true nature of her sale of those 4,000 shares of ImClone stock, the day before the Food and Drug Administration gave a thumb's down to the company's cancer drug.
Now, Martha Stewart has resigned, as Miles said, as chief executive of her company, but she remains open the board of directors and is also taking on a new title, chief creative officer. She's also still the top shareholder of the company. So the stock price still very important to her. And by the way, today that stock is up about 2 percent. Yesterday, it was up about 5 percent.
So, Miles, it seems the people who had sold off the stock because of the scandal are already out of the stock.
O'BRIEN: I am still scratching my head over that one. Just quickly, Allan, what's the next step we're going to see? When's her next appearance in court or what is the next legal action we're going to see?
CHERNOFF: Well, a judge was assigned to the case yesterday. So the judge really has to determine exactly what the schedule is going to be. But it's going to be a matter of months, clearly, before they move forward. And the investigation took a year and a half, so we can expect that this, certainly, is not a case that's going to come to court in any time soon.
O'BRIEN: Allan Chernoff, thank you very much. Appreciate your insights, as always.
As Allan just pointed out, while she did resign as CEO of the company. Martha Stewart still going to have a big impact on that company, presumably, the chief creative officer will do just that.
Terry Gaudet joins us now. She is of West Hartford, Connecticut. And she owns some stock in the firm and is a big supporter of Martha Stewart. Ms. Gaudet, good to have you with us, first of all.
TERRY GAUDET, MARTHA STEWART LIVING OMNIMEDIA STOCKHOLDER: Thank you very much.
O'BRIEN: Are you in mourning today?
GAUDET: Certainly not. I'm not real happy that Martha has resigned, but that's the way she has to fight the game. I think she's taking the gloves off and she's going to go for it. She's a feisty lady and she's a brilliant business woman...
O'BRIEN: Is that what you admire about her, feistiness?
GAUDET: No, I admire her taste. I think she's just a great businesswoman. And she's going to fight her game. And she can't do that, really, being the CEO, as I would understand it. So now, look out. She's going to get you.
O'BRIEN: All right. Now, your portfolio -- you have a fair amount of Martha Stewart stock, 6 or 7 percent, I guess of your portfolio, right?
GAUDET: Well, I wouldn't say that's a lot. I don't have a great, big portfolio. Just you know, very small.
O'BRIEN: All right. But you've lost some money.
GAUDET: Sure, I have. But I've lost money on other stock, too. But it will come back. That comes back. You know, I don't consider that a great disaster. I don't think it's been a great economy. But I think Martha Stewart is a winning product.
O'BRIEN: Didn't you find it at all interesting, though, that the securities fraud charge against her was not specifically relating to the ImClone insider trading allegation, but it was the allegation that she lied to people like you about the state of her company by saying everything is fine. Do you feel lied to?
GAUDET: No, I certainly don't. I mean, all of us have answered questions spontaneously. I don't know how the question was asked to her. And I -- no, I don't find any evil in that at all.
O'BRIEN: You don't think she misled stockholders in Martha Stewart Omnimedia like yourself?
GAUDET: I truly don't -- I truly don't think that, being as brilliant as she is -- and she has a wonderful demeanor about her -- that she is evil. I mean, I think that, you know, mistakes are made. Business decisions are made. Sometimes they're right. Sometimes they're wrong. Sometimes things are translated differently than they meant to be spoken.
But, you know, that's life. That's why we have apologies. That's why we have full page ads in papers.
O'BRIEN: Of course, we haven't seen an apology, have we?
GAUDET: Well, you don't know. I mean, the game's not over yet. Martha Stewart has brought good taste to the masses and made it accessible and I think, for that, the woman should be canonized. And...
O'BRIEN: Well, could she perhaps be considered guilty of hubris, maybe?
GAUDET: I'm not really sure.
O'BRIEN: Yes. All right. Terry Gaudet, thank you for your time.
GAUDET: You're very welcome.
O'BRIEN: Wearing your Celadon Green blouse, I noticed.
GAUDET: Yes, thank you.
O'BRIEN: And thank you for being with us. We appreciate it.
GAUDET: You're very welcome.
O'BRIEN: All right. Take care.
Terry Gaudet is a Martha Stewart stockholder, joining us from West Hartford.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com