Abstract

The case examines the career of Martha Stewart, a second generation Polish immigrant in America, who fashioned herself into a lifestyle and housekeeping expert. Her business empire which was named after her was involved in publishing, television shows, retail merchandizing and direct selling. In December 2001, she sold about 4000 shares of Imclone, a biotech company, a day before its share prices fell (due to FDA’s rejection of its application for a new cancer drug). When news of this sale came to light in June 2002, she was suspected of making the sale on the basis of non public inside information. This controversy had a negative impact on her business. In this context, analysts questioned the wisdom of associating a company too closely with a person.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Dangers of centering a company around a person who comes to represent its brand.

Keywords

Martha Stewart, second generation, Polish immigrant, America, lifestyle, housekeeping expert, business empire publishing, television shows, retail merchandizing, direct selling, December 2001, 4000 shares, Imclone, a biotech company, FDA, cancer drug, June 2002