Shares of Martha Stewart's (search) namesake company slid after she was found guilty Friday of all counts in her criminal trial.
Martha Stewart Living Omnimedia Inc. (MSO) stock dropped about 24 percent when it reopened on the New York Stock Exchange (search), erasing a 17 percent jump just before the stock was halted for news of the verdict.
Shares of Kmart Holdings Corp. (search) , the company's retail partner, dropped about 2.8 percent.
Martha Stewart Living, a media and merchandising company, said its board will meet promptly to evaluate the situation, and that the company is confident it has more than enough assets to continue the corporation's development. Martha Stewart said she will appeal the verdicts in a letter posted on her personal Web site.
Analysts said the guilty verdict thrusts the future of the company in doubt.
The company likely will have a tough time attracting advertisers to its TV programs and magazines, which already have suffered during Stewart's legal travails, and it might decide to put itself up for sale, said Peter Cohan, a management consultant in Marlborough, Massachusetts.
"The fact she was found guilty to me means the odds of the company being put on the block go up quite a bit," he said.
Martha Stewart Living shares fell $3.43 to $10.60 when trading resumed.
Before the verdict, the stock soared to 21-month highs, gaining more than 17 percent to trade as high as $16.75.
The pre-verdict gains reflected speculation that Stewart was going to be found innocent, Keith Keenan, vice president of institutional trading at brokerage Wall Street Access, said.
Before the verdict, shares in the company had climbed more than 40 percent this year.
Martha Stewart Living has struggled throughout its founder's legal woes, with advertising pages in its flagship magazine sliding about 35 percent last year. The company posted an annual loss for 2003 and forecast more losses in the current first quarter.