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Your Money: McCain vs. Obama
See where the presidential candidates stand on the major economic issues like gas prices, taxes, mortgage crisis, jobs, health crisis and more.
Your Money: McCain vs. Obama - CNNMoney.com

If Only Martha Stewart Was a Little More Patient
If they only had been more patient investors of ImClone Systems, Martha Stewart and others might have done just fine, and avoided jail time. In a strange twist, ImClone -- the biotechnology company whose stock was dumped just before bad news was announced about an experimental cancer drug -- has received a multibillion-dollar takeover bid pegged to the success of that very same drug.
Once Dumped, ImClone Soars - NYTimes.com

Heinous Parents of the Stars
Dina Lohan, mom-ager to tabloid darling Lindsay and lesser known Ali, is just one example in a long, sordid history of American stage parenting. Take a look at MainStreet's roundup of other Hollywood nightmares including the Jackson's, Cyruses, Barrymore's, Archuletta's and Crawford's.
Heinous Parents of the Stars | MainStreet

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Bad news out of Martha Stewart Living Omnimedia (NASDAQ: MSO) today: CEO Susan Lyne has stepped down after four years as the company's CEO. President of Media Wenda Harris Millard and President of Merchandising Robin Marino will become co-CEOs.

Oh, how quickly things change. Back in April, Martha Stewart Living announced that it was acquiring the Emeril brand for $50 million, with an optimistic Lyne saying, "This acquisition is strategically important to our company as we continue to expand and diversify our business and represents a significant opportunity for us going forward." The company said it expected the acquisition to add $8 million of EBITDA in its first year of operation. Now Lyne is gone without explanation, and the press release didn't even mention the "strategically important" Emeril deal, which has a value of more than 10% of the company's market cap.

No word yet on what's going on with Martha Stewart Living Omnimedia but my experience has been this: when a CEO makes a big acquisition and then turns around and heads off into retirement with a chorus of "Brownie, you did a heck of a jobs," something is amiss.

"Our principal goal was to rebuild the company and return it to profitability," Lyne said in the press release. "We have done that."

Yet the stock is trading at a fraction of its value of less than a year ago.

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MAJOR PAPERS:

• In a diversification move, Martha Stewart Living Omnimedia Inc (NYSE: MSO) will reportedly acquire the media and licensed properties of well-known TV chef Emeril Lagasse for $45M in cash and $5M in stock, according to the Wall Street Journal.
• According to the Wall Street Journal's "Heard on the Street," the current quarter for Lehman Brothers Holdings Inc (NYSE: LEH) will not be good and it also has a sizable amount of commercial real estate loans which could lead to bigger write-downs. The latest estimates are of an approximate $1.3B write-down, above recent estimates, and higher than the $830M in the fourth quarter.

• The Australian Financial Review reported that General Electric Company (NYSE: GE) has emerged as a new contender for Allco Finance Group's transport leasing, property and power assets.

• Motorola Inc (NYSE: MOT) is suing Research in Motion Limited (NASDAQ: RIMM) claiming the company violated seven U.S. patents covering mobile-communications technology, Bloomberg reported. Research in Motion also filed a suit against Motorola claiming the company infringed on Research in Motion patents.

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With its stock sitting in a toilet that would make the housekeeping goddess cringe, Martha Stewart Living Omnimedia (NYSE: MSO) is looking for something to boost its operations.

Fortune reports it has learned that the company "has held recent talks with two prominent tastemakers, the fashion designer Cynthia Rowley and Jonathan Adler, known for his home décor, with the aim of building multifaceted brands around these personalities that span television, publishing and the internet."

The talks have reportedly broken off, but CEO Susan Lyne has said that she is on the prowl for acquisitions. Acquisitions have a bad habit of failing to generate value for the acquirer, and Fortune notes that "The pressure to do a deal will intensify this year, as MSO prepares to take a hit on several fronts." And therein lies the problem.

The company has historically been unable to generate a profit, and that's not going to get any better in the near future. An acquisition driven by what amounts to desperation is unlikely to change that. And signing a big star will cost a lot money, and the value of that star's brand will tend to aggregate to them, not MSO -- that's the nature of licensing deals.

Bottom line: If you want to buy shares of MSO, it should be because you're bullish on the future of the company as it is now, not because you're hoping that a management team that has failed to generate value can make a killer acquisition that will restore the company to its once high-flying status.

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When I got together with my most artsy-crafty-design savvy friends to mourn the shuttering of House & Garden, we sat both magazines next to one another and compared. We agreed that Blueprint, with its insultingly-young editorial staff and its focus on pricey glitter over substance, with the unfulfilled promise of its tagline ("design your life") was vastly inferior to House & Garden. And if the superior is ceasing publication (after 100 years!), what chance did this strange intersection of fashion and shelter mags ever have? None. Far less simple than Real Simple, far less stylish than House & Garden, far less useful than Martha Stewart Living, the title was doomed from the start.

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This post is part of our Money Face-Offs feature. Let us know who you think comes out ahead in this head-to-head match-up, and check out our other Money Face-Off posts.

Celebrities -- they're more than superior human beings, they're money-making machines. If these celebrities were stocks, which would be the shrewd buy?

One sure sign of celebrity is first-name recognition, and today's contestants have certainly reached that pinnacle. Oprah and Martha are brands known worldwide, Oprah for compassion and wisdom, Martha for style and elegance.

Martha Stewart's brand is still tainted by her 2004 insider trading conviction and her stretch in Camp Cupcake. Before then, her growth from model and stockbroker to America's favorite lifestyle celebrity was impressive. After authoring the bestselling book Entertaining in 1979, she transitioned to television with her hit show Martha Stewart Living, for which she gathered several Emmys. In 1987, she inked a lucrative deal with déclassé retailer Kmart as a lifestyle consultant, to help it break into higher price-point retailing. In 1990, with Time Warner (NYSE:TWX) she launched Martha Stewart Living Magazine. The zenith of her career came in 1997 when she took herself public. The IPO for Martha Stewart Living Omnimedia (NYSE: MSO) made her a billionaire.

Since her conviction, the company has struggled to make money. The company has four profit centers. In television, her version of the hit show Apprentice was a 2006 flop, while her The Martha Stewart Show faces tough competition. The company hopes adding Macy's to retailers of MS-designed goods will boost that lagging segment. Magazine sales of Martha Stewart Living chug along at 1.9 million, while internet revenue remains a small part of the empire.

Oprah Winfrey began life with far less advantage than Martha, and much has been made of her amazing transition from child of a poor Mississippi single mother to billionaire. What the two women share is exceptional intellect. Winfrey launched her career as a newscaster in Chicago before finding her true calling as cohost of a local talk show. In 1985, she received an Academy Award nomination for her role in Steven Spielberg's The Color Purple, a springboard for the launch, in 1986, of The Oprah Winfrey Show. Her compassion, insight, and ability to talk with, and not down to, her audience and guests quickly made her a daytime hit. In a shrewd business decision, she started her own production company, Harpo Productions. In 2000, Oprah unveiled her own magazine, O, which has grown to 2.6 million in monthly sales.

She is known for her charitable work, including the recently opened Oprah Winfrey Leadership Academy for Girls in South Africa. Winfrey was #1 in the most recent Forbes Celebrity 100, with $260 million in annual earnings.

Two powerful women, and two powerful brands. So which would you pick?

Oprah is 53, Stewart 66, so she has the age thing going for her. Martha is still recovering from her conviction, while Oprah's charitable work has burnished her reputation. Stewart has been unable to elevate her show above the many competitors, while Oprah is solidly entrenched in her slot. Oprah is also more focused businesswise, while Martha Stewart the corporation seems to be chasing squirrels up every tree in the forest, with not much success.

So would you choose a good meal or a good chat?

Vote in our poll for Martha Stewart or Oprah Winfrey, and let us know in the comments why your choice has the financial edge in this match-up. Also be sure to check out our other Money Face-Offs.

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MAJOR PAPERS:

• According to the Wall Street Journal, citing a person familiar with the matter, Bear Stearns Companies Inc (NYSE: BSC) plans to give its top trader, Warren Spector, the ax.
• The Wall Street Journal reported that Kroger (NYSE: KR) announced last week that it would stop selling milk that carried synthetic hormones that are made by Monsanto Company (NYSE: MON), despite the FDA saying the hormones are safe.
• A group of financial experts predicted that the U.S. will enter a recession soon, due to inflation, the economic prescriptions of a Democratic president, and the housing market meltdown, reported Barron's Magazine.

• According to insiders, Martha Stewart is not happy with Lampert's Kmart chain as she feels the company is not doing enough to sell her Martha Stewart products in its stores, which in turn is causing a "drag" on Martha Stewart Living Omnimedia Inc's (NYSE: MSO) earnings, reported the New York Post.
• While shopping on the Internet has always been a 24-hour ordeal, some traditional retailers such as Sears Holdings Corporation (NASDAQ: SHLD), Kohl's Corporation (NYSE: KSS) and Dick's Sporting Goods Inc (NYSE: DKS) are starting to realize the potential of offering online-only discounts when their stores are closed, reported the Chicago Tribune.
• Qatari investment firm Delta Two may have to provide more than GBP1B in additional equity in order to win backing from J Sainsbury's (OTC: JSAIY) board for its offer for Sainsbury, reported the U.K. Times.

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MAJOR PAPERS:

• Paul Tudor Jones runs some of the best managed hedge funds anywhere, averaging over a 24% annual return over the last 20 years, but last month they reported heavy losses, according to the Wall Street Journal.
• The Wall Street Journal reported that Google Inc (NASDAQ: GOOG) is speaking with wireless operators , such as T-Mobile USA and Verizon Wireless, as well as phone manufacturers about carrying their products.
• The Financial Industry Regulatory Authority is expected to fine Morgan Stanley (NYSE: MS) a total of $6.1M for alleged overcharging of customers on bond sales totaling $59M, reported the Wall Street Journal.
• Barron's "Inside Scoop" section reported that Andrew J. McKelvey, who stepped down as Monster Worldwide Inc's (NASDAQ: MNST) chairman and CEO last October, has sold 1.27M shares for $48.6M on the open market since Friday, according to SEC data.

• Martha Stewart Living Omnimedia (NYSE: MSO) is reportedly joining with private-equity partner GTCR Golder Rauner to buy food-crafting company Wilton Industries and paint-by-number specialist Dimension Holdings, reported the New York Post.

• According to DigiTimes.com, Taiwan component suppliers for the iPhone have said they are not seeing any reduction in orders from Apple Inc (NASDAQ: AAPL).

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Though Martha Stewart Living Omnimedia Inc. (NYSE: MSO) today reported decent second-quarter results, its future as an independent company remains in doubt in the wake of News Corp.'s (NYSE: NWS) $5 billion acquisition of Dow Jones & Co. (NYSE: DJ).

First the numbers. The company reported a net loss of $6.37 million, or 13 cents per share, compared with a loss of $1.17 million, or 2 cents, a year earlier. Revenue rose 7.7% to $73.4 million. Excluding one-time items, the company's loss was 9 cents. Wall Street was expecting a loss of 9 cents on sales of $71 million, according to Thomson Financial.

Chief Executive Susan Lyne, who has done a better job running Martha Stewart Living than Stewart herself, expects the New York-based company to return to profitability this year. The company maintained guidance for revenue this year of $333 million to $340 million and for $68 million to $75 million in the quarter.

Investors, though, are clearly expecting more from the domestic diva. Shares of the company have plunged more than 38% this year. The few Wall Street analysts who cover the company seem lukewarm on the stock at best and there is little chance that sentiment will change.

Though Martha Stewart is a formidable brand, the company remains a tiny fish in the vast media ocean. Sooner or later, it will get swallowed up by a bigger fish or even a shark like News Corp.

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Dow Jones & Co. (NYSE: DJ) expects to reach an agreement to sell itself to Rupert Murdoch's News Corp. (NYSE: NWS), ending a months-long soap opera that's tried the patience of media nerds like myself, according to CNBC's David Faber. No word on the final terms.

Looks like all of the chest pounding and teeth gnashing by Murdoch's many detractors, including members of the Bancroft family which owns Dow Jones, failed to stop the Australian media mogul just as I expected. The Bancrofts had no other choice. Saying "yes" to Murdoch, was much more lucrative and less potentially litigious than saying "no." There is no doubt that minority shareholders would have sued the Bancrofts for turning down Murdoch's $5 billion offer since the stock would have beeen sent into a tailspin from which it would never recover.

Worries about Murdoch are justified. You can expect the complaints about the tycoon's meddling in the Journal's editorial practices to surface in about six months to a year, perhaps sooner. It will be subtle and difficult for most readers to notice but it will happen. Though many Dow Jones journalists are cringing at the thought of working for Murdoch, they have little choice but to put up with him. Dow Jones pays well in an industry famous for paying poorly. Plus, most media companies aren't doing much hiring because of the current business conditions.

Since Dow Jones appears to have gotten a ridiculously high price for its company, Wall Street will wonder why small media companies such as the New York Times Co. (NYSE: NYT), E.W. Scripps Co. (NYSE: SSP), Martha Stewart Living Omnimedia Inc. (NYSE: MSO) and Gannett Co. (NYSE: GCI) can't do the same.

They better come up with an answer quickly.

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Mergers come to sectors in waves and now its media's turn.

There are many companies that would be of interest to either public or private buyers including Gannett Co. (NYSE: GCI), E.W. Scripps Co. (NYSE: SSP) and Martha Stewart Living Omnimedia Inc. (NYSE: MSO).

Shares of Gannett, the largest newspaper publisher, have tanked more than 20% over the past five years as advertisers fled to the Internet. The company, though, has a solid management team that has made many accretive acquisitions.

Scripps has long been a favorite on Wall Street. The company's cable business, which includes the Food Network and HGTV, is great and its newspaper business is no worse off than others, which I realize is faint praise. Its shares are down 13% this year.

Martha Stewart Living, whose shares have plunged 15% this year, has defied the skeptics.

Even though the company recently said its first quarter loss widened, the results did beat Wall Street expectations. Chief Executive Susan Lyne has done a good job in expanding the Stewart brand. The recent prepared food deal with Costco Wholesale Corp. (NASDAQ: COST) seems to have potential.

Other targets include The New York Times Co. (NYSE: NYT), which I've argued before, satellite radio companies XM Satellite Radio Holdings Inc. (NYSE: XMSR) and Sirius Satellite Radio Inc. (NASDAQ: SIRI) and Belo Corp. (NYSE: BLC), which owns the Dallas Morning News along television and radio stations.

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Things are looking up at Martha Stewart Living Omnimedia (NYSE: MSO). Recently released fourth quarter 2006 figures show a whopping 5X profit growth over fourth quarter 2005. Fourth quarter 2006 revenues rose 15% to $97 million, while operating income increased to $14.6 million, up from $2.5 million in fourth quarter 2005. 2006 EPS were 31 cents per share for the quarter, up from 6 cents per share in 4Q 2005.

For FY 2006, revenues increased 36% to just over $288 million, with much lower operating income loss of $(2.8) million, compared to a loss of $(78.3) million in FY 2005. All segments of the Martha Machine show healthy growth, from magazines and TV shows to home fashions. Ad revenue was up 26% to just about $24 million, circulation at all Omnimedia publications was up -- Martha Stewart Living, Everyday Food, Body + Soul, and Blueprint, with an overall 11% increase in the number of ad pages.

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Ratings for both the Martha Stewart TV and radio broadcast increased, and Martha Stewart products have moved into Macy's and beginning in early 2007 over 900 Michael's arts and crafts stores. In the spring, Martha Stewart Colors paint program will begin to roll out at Lowe's hardware stores nationwide. The company forecasts FY 2007 revenue in the $330-340 million range.

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