Wednesday, March 23, 2005

MSO EXPRE$$

The Martha Stewart Omnimedia Express is about to pull out of the station. This is one of those stocks that swings wildly for no other reason than media hype and interest. The swings in value are not connected to any fundamental barometer used by the experts in the stock market, therefore, taking this one for a ride is gambling, but the payoff can be good and so far it's paid very well.

One of the swings began at $8.25, in July '04, prior to Martha announcing she would be going into prison early; when she finished her term, 5 months later, she boarded her private jet at $37.45. She went to prison a mutimillionarie and came back a billionarie, for the second time. Now she's back to being a mutimillionarie again. Why? Hype, and the lack of it. Her company is in the dumper. It's similar to the dotcoms of the '90s. Many of those companies never made dollar one, but, yet, their stock values headed skyward. Hype. In the last 5 years her stock was at its highest point as she left prison. Hype.

Now that Martha is on home arrest and temporarily off the media's radar screen, her stock has fallen back to about $20. I figure the bottom is in a window of $16 to $20, give or take. I'm no expert, I'm gambling.

Martha, The Donald, and Mark Burnett are hooked up to produce a spin-off of "The Apprentice," Starring Martha. Right now, all's quiet on the media front. This is what's called the "ground floor," and it's right where you want to be.

All that's happening now is the vetting process of a million applications for a spot on the show. As they get closer to the final group, talk in the media will start. Trump and Burnett will make sure there's talk, and a lot of it. Hype won't begin to describe the exposure this show is going to receive.

The hype will increase as certain stages of the production are arrived at; the show's contestants are announced; broadcast dates are set with aggressive ad campaigns launched; and inbetween there will be numerous, leaked stories about what has happened during taping of the show. On top of all that, anticipation will be building for MSO and Martha's comeback.

Like her or not, Martha's show will open to a mega-huge audience. And during the run-up to the first show, in the fall, will be a steady increase in MSO's stock value. Why? HYPE!!!!

My plan is this: buy now, and if it falls, buy more. Put a sell order in for the day of the first show. Martha isn't very good on tv, so tanking after the first show won't be a surprise. Trump can pull it off, but I don't think Martha will come close to his success. If she pulls it off, great, but it won't matter because by then I will be most satisfied. Besides, I don't gamble that much.

All aboard at $20.66....

Next stop, $60.00


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