Bad news out of Martha Stewart Living Omnimedia (NASDAQ: MSO) today: CEO Susan Lyne has stepped down after four years as the company's CEO. President of Media Wenda Harris Millard and President of Merchandising Robin Marino will become co-CEOs.
Oh, how quickly things change. Back in April, Martha Stewart Living announced that it was acquiring the Emeril brand for $50 million, with an optimistic Lyne saying, "This acquisition is strategically important to our company as we continue to expand and diversify our business and represents a significant opportunity for us going forward." The company said it expected the acquisition to add $8 million of EBITDA in its first year of operation. Now Lyne is gone without explanation, and the press release didn't even mention the "strategically important" Emeril deal, which has a value of more than 10% of the company's market cap.
No word yet on what's going on with Martha Stewart Living Omnimedia but my experience has been this: when a CEO makes a big acquisition and then turns around and heads off into retirement with a chorus of "Brownie, you did a heck of a jobs," something is amiss.
"Our principal goal was to rebuild the company and return it to profitability," Lyne said in the press release. "We have done that."
Yet the stock is trading at a fraction of its value of less than a year ago.
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