Now Martha faces her own $64,000 question
Remember the TV game show scandals of the late 1950s? Neither do I, except in my avocation as a trivia buff. The more “charismatic” (read: good-looking) contestants on the fabulously popular “The $64,000 Question” had help with their answers. Apparently, the producers thought the question was how to achieve high ratings the following week, and the answer was attractive contestants, whether they knew the answers or not. That is known as cheating, among ordinary folks.
Martha Stewart has rarely been described as ordinary folks, but just the same, a jury convicted her of cheating. But NOT on her TV show. Apparently she used insider information when she sold her stock in Imclone.
Here is what I don’t understand. Stewart is a former stockbroker and later took her eponymous corporation public in 1999, so she knew the rules of the stock exchange at least as well as she knew how to throw the perfect dinner party. While the numbers involved may seem large to you, they were a pittance when compared to her net worth.
In round figures: She bought about 4,000 shares at less than $10 per share and saw the shares climb to a high of $75 before beginning a plunge when the FDA failed to issue an approval on time. Martha, allegedly utilizing insider info, sold at $60 and made a tidy profit while the stock continued to sink.
Whatever happened to the concept of “buy and hold?” Had she held on, the stock would have never been worth less than she paid for it, and Imclone would eventually receive its FDA approval. When that happened, the stock began to climb, and as of her conviction date was worth about $44 a share.
That’s about $16 a share less than she got. Sixteen dollars times 4,000 shares is, ironically, $64,000. So here is a $64,000 question for Martha: Was it worth ruining your reputation, your finances, AND your own company?
If I’m ever talking with Martha about when to hold ’em and when to fold ’em, be assured we will be discussing table napkins or her cellmate’s prison uniforms and NOT stocks.
It is time to take stock of another situation here at Clear Creek Ranch. Now that the weather is drier and warmer, I’ve resumed my early morning stroll out to the mailbox on the county road. We are talking 3.5 miles round-trip, with several dramatic changes in elevation.
Other than a few mildly territorial dogs, there isn’t much to occupy my mind on this hour-long jaunt. So I’ve been looking at the road. The winter has not been kind to it – erosion, clogged ditches and cracked paving that the Road Repair Guy calls “alligatoring.”
And garbage everywhere, mostly beer cans. I picked up thousands of them during my walks last year! Although I am not a trained roadside archeologist, I detect a trend in consumption habits of the litterers who lurk among my neighbors. There is a distinct shift from the more weathered cans of Bud and Bud Lite (and even some Budweiser longnecks) to an upper strata of relatively shiny Coors 24-ouncers.
Not enough of a trend for me to short Anheiser Busch stock (BUD) or go long on Adolph Coors (RKY – as in Rocky Mountains?) I have an aversion to stocks with a “cute” NYSE or NASDAQ symbol. The condition of the road has moved beyond the point where symbolic gestures will work. A backhoe may be required.
If we could just shovel the empties into the potholes on the road, our road association could solve two problems at once. As it is, we will be meeting at the nearby school house soon to discuss matters transportational.
Here’s hoping our decisions don’t cost anywhere near $64,000.
Mike Drummond is a Nevada County writer whose column appears on Tuesday. You can write him in care of The Union, 464 Sutton Way, Grass Valley, 95945; or e-mail him at email@example.com.
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