Shares of Martha Stewart Living Omnimedia Inc. hit a historic low yesterday on news that a broker cast doubts on Martha Stewart’s versions of a trade of ImClone stock, according to Reuters.
Stewart, the queen of labor intensive crafts and cooking, has been under intense scrutiny for selling nearly 4,000 shares of ImClone Systems Inc. on Dec. 27, just one day before the Food and Drug Administration rejected the biotech company’s experimental cancer treatment.
Martha Stewart shares fell as much as $4.10, or 26%, to $11.87 in heavy trading on the New York Stock Exchange, reaching their lowest point since going public in late 1999, before recovering slightly in the late afternoon. The stock, the NYSE’s biggest loser for the day, closed down $3.42, or 21%, at $12.55, the report said.
Martha Stewart’s stock price has dropped about 34% since Stewart’s ImClone trades were uncovered on June 6, when it closed at $19.01.
The stock was driven down after reports that a sales associate of one of Stewart’s stock brokers, and Douglas Faneuil provided information that led the brokerage to doubt that a stop-loss order, which Stewart claims was previously arranged, ever existed, the report said.
Stewart’s stockbroker, Peter Bacanovic, and Faneuil, were placed on administrative leave by Merrill Lynch & Co. last Friday, pending an investigation.
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