The dismal prospect of a jailhouse Thanksgiving notwithstanding, Martha Stewart had something to be thankful for yesterday, when her company’s share price soared.
The stock of Martha Stewart Living Omnimedia climbed as high as $22.32 – the highest its been in over a year – before settling back down to close at $21.74, up $1.61, or 8 percent for the day.
The one-day gain created a $48.3 million paper profit for Stewart, bringing the value of her total stake to $652 million.
Stewart is serving a five month term at Alderson Federal Prison Camp in West Virginia for lying to federal investigators about a stock sale.
The shares of MSO have been on the rise following last week’s announced takeover of Sears, Roebuck & Co. by Kmart. The deal is expected to benefit MSO by offering a wider outlet for Stewart’s Everyday houseware and garden products currently sold only at Kmart stores.
But yesterday’s run up included a new wrinkle, in the form of a rumor making the rounds on Wall Street that suggested the merged company, to be called Sears Holdings, might cement its relationship with Stewart by taking an undisclosed stake in her company.
Representatives of MSO, Sears and Kmart were not immediately available for comment.
Traders offered another possible explanation for the rise in MSO shares yesterday, typically a light trading day ahead of the Thanksgiving holiday. With MSO’s stock up almost 25 percent in the wake of the Sears-Kmart deal, those who were short the stock have been forced to buy shares to cover their positions, effectively driving the share price higher.