Product details

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 merchandising and direct selling. In December 2001, she sold about 4,000 shares of Imclone, a biotech company, a day before its share prices fell (due to Food and Drug Administration'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. The case discusses the dangers of associating a company too closely with a person and the risks the company faces when the said person's image is tarnished. It also examines the issue of insider trading by the head of a public company and its fallout.