NEW YORK – Sentenced to prison but free for now, Martha Stewart faces a wrenching choice – whether to start serving her time immediately or stay out on appeal.
The celebrity homemaker herself has said her “belief in the judicial system and fairness” suggests she should put off going to prison, as a judge has allowed her to do, and hope an appeals court overturns her conviction.
But experts on corporate branding and securities analysts say Stewart – or, more accurately, the company she loves – may be better served if she does the time right away.
“The faster you can get this behind you, the better,” said Eric Dezenhall, who runs a Washington, D.C.-based public relations firm that specializes in damage control.
“Henry Kissinger once said that what will come out eventually must come out immediately.” He added, “The implication being, it’s the striptease that kills you.”
Stewart was sentenced earlier this month to five months in prison and five months of house arrest – the minimum penalty under federal guidelines – after she was convicted of lying to authorities about a 2001 stock sale.
The federal judge who oversaw her case, citing confusion over a recent Supreme Court ruling about criminal sentencings, allowed her to stay out of prison while she appeals – a process that could last well into 2005.
Walter Dellinger, the appeals specialist lawyer now handling Stewart’s case, said Monday that Stewart is considering whether to “sacrifice herself” for the good of her company, Martha Stewart Living Omnimedia Inc.
“She’s willing to think about this because of the company,” Dellinger told ABC’s “Good Morning America.” “It is a complicated issue because there’s very valuable time she can spend right now for the company.”
He said Stewart would make a decision “fairly soon” about whether to begin serving her time.
It should come as no surprise that the fate of the company, from which Stewart resigned as CEO but remains as founding editorial director, weighs heavily on her decision.
On July 16, minutes after her criminal sentencing, Stewart stood in front of the courthouse urging people to show support by subscribing to her magazines and buying the company’s products.
Stewart remains the largest shareholder in Martha Stewart Living Omnimedia and has hundreds of millions of dollars tied up in its stock.
Shares in the company, which had been trading around $9 earlier in the summer, shot up past $11 when Stewart was sentenced – and jumped above $12 while her lawyer talked about the appeal on live television outside court. On Monday, MSLO shares rose 15 cents to close at $11 on the New York Stock Exchange.
But some Wall Street analysts believe investors would rather see Stewart serve her time and put the matter – a criminal investigation that has hung in the air since summer 2002 – behind her.
“As long as she goes to appeal and stays out, and this whole thing goes on, the advertisers have an excuse for not coming back,” said Dennis McAlpine, an analyst with McAlpine Associates who covers the company. “And the company stays in this weird sort of limbo.”
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