Transcript: Martha Stewart's Comeback

This is a partial transcript from "Your World with Neil Cavuto," August 25, 2005, that was edited for clarity.

TERRY KEENAN, GUEST HOST: Shares of Martha Stewart Living Omnimedia (MSO), Martha's namesake company, pick up more than $3, ahead of her release from home confinement next week. The kitchen queen flashing her ankle bracelet for the cameras at a press conference earlier today.

(BEGIN VIDEO CLIP)

MARTHA STEWART, MARTHA STEWART LIVING OMNIMEDIA: Oh, I have a microphone on one ankle and another bracelet on the other ankle. So, I am well balanced today.

(LAUGHTER)

(END VIDEO CLIP)

KEENAN: She has those orange pumps as well. Martha Stewart and the king of reality TV, Mark Burnett, taking questions from reporters on their two upcoming television programs, one a daytime talk show, the other, "The Apprentice." Both, as we got a glimpse of today, will show the softer side of Martha. While her company's stock has been struggling to get back to where it was right before her release from prison, it's still up 158 percent in the past year.

Well, from skyrocketing stock to Martha's image, will she be able to recapture her fan's hearts with her newest ventures? Let's ask Ronn Torossian. He is CEO of 5W Public Relations. And here to tell us if Martha's stock will continue at this rapid pace, Charles Payne, CEO of Wall Street Strategies. Welcome to you both.

OK, Ronn, this is the biggest debut, even bigger than when she was a debutante back in the 1960s. How is she going to do?

RONN TOROSSIAN, CEO, 5W PUBLIC RELATIONS: I think it is brilliant.

I think coming out and showing the softer side of her, her full recovery. And I think, frankly, people don't care at this point. She was in a few months. It was not the end of the world. I think her brand will only go from higher to higher to higher. I think she will succeed. And I think it is a better, kinder, softer, better Martha Stewart.

KEENAN: Charles, do you agree or do you think she's kind of jumped the shark here and people are just sick of hearing about her, her bracelet, her home confinement, everything?

CHARLES PAYNE, CEO, WALL STREET STRATEGIES: No. I think we are in a day and age where someone like Martha Stewart really plays well.

And now she is sort of almost the people's champ, if you will. A lot of folks who probably didn't like her or probably didn't really identify with her years ago probably do now. You know, the interesting thing about the stock, it was up big today, as you noted. It has a lot of potential to go up a lot more, because not only is Martha Stewart a cult on the outside, but she has also has a cult following with her stock and particularly because it can move very quickly in a very short period of time.

KEENAN: Because she owns so much of it, there is only a little bit of stock out there for other people to buy.

PAYNE: Right. It has to be noted, there is a huge short position.

And for people who don't know what that means, that means people have already sold this stock without owning in. Sooner or later, they have to go and buy it. Over 50 percent of the shares that are out and available to the public has already been sold. They have got to buy the stock. What could happen if, if this stock continues like it was today, there could be what is known as a big-time short squeeze.

KEENAN: Is Martha going to be the desperate housewife of 2005?

TOROSSIAN: I love the diversification.

This person, who is an intricate businesswoman, who is a homemaker, she is involved in so many different things, from satellite radio to "Apprentice" TV.

KEENAN: To white-collar crime.

TOROSSIAN: To, of course, her business.

You know, again, I think people make mistakes. I think she is well beyond it. You know, I don't know if I love showing off that ankle bracelet, but I think, in terms of her brand, she is going to get bigger, bigger and better.

KEENAN: And you don't think it is a problem that she sort of thumbed her nose at her whole probation process? She got a pretty good deal...

(CROSSTALK)

TOROSSIAN: This is no Michael Jackson. This is not child molestation. This is not Tyco. This is not Enron.

She did what she did. I mean, she was riding around on a car around. I don't think it is the end of the world. And, frankly, I don't think it is a big deal and most people just don't care. She needs to continue making good product, continue smiling, laughing, and she is going to continue to win.

KEENAN: Charles, the advertisers have started to come back a little. But this time last year, her entire magazine was entirely Kmart ads, as you know, just kind of a trade. She didn't have any advertisers. They're creeping back, but the revenues are still not that strong.

PAYNE: And you are absolutely right.

And, in a way, that is sort of good. You know, her company, the margins are lower than their pairs. Their volume, their revenues are lower. So, they have a real good position to actually do better. You know, a lot of times, on Wall Street, a company that is doing poorly, when they show signs of growth or that they're coming back to life, the stock is richly rewarded.

So, I think this stock is going to make a real nice move in the short term, maybe get back up to $34.

KEENAN: And the TV revenues are only going to help?

PAYNE: The TV revenues won't help the company per se. I think that she has a separate deal from the public company.

KEENAN: She's getting a lot of that.

PAYNE: But, obviously, it will help the image and help the brand.

TOROSSIAN: And consumers will take some time to respond. You know, the brand will continue to build. It won't be overnight. But once she loses that ankle bracelet, once she gets out more in front, and she's involved in so many different places -- for me, the television will only allow more consumers to help her be seen.

KEENAN: I am looking forward to her turkey recipe, because, every year, she puts one out. One is more impossible than the next. Maybe this year, she will put the ankle bracelet on the turkey.

PAYNE: Or a file. She will have a file in it this year.

(LAUGHTER)

KEENAN: OK. Well, we will see. We will all be watching her show, I'm sure.

Ronn Torossian and Charles Payne.

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