Martha Stewart Makes Waves — Wednesday’s IP Market Recap

Investors didn’t have to look toward Wall Street for Wednesday’s biggest financial movers and shakers — the local mall was where all the action was.

America’s homemaker extraordinaire will become a mainstay of J.C. Penney (NYSE:JCP), which said Wednesday that it would buy a 16.6% stake in Martha Stewart Living Omnimedia (NYSE:MSO), sending MSO shares up 33% on the day.

The 10-year partnership would see most J.C. Penney locations roll out small, in-store Martha Stewart shops in early 2013. These stores will include employees trained specifically for the Martha Stewart brands and will offer advice on products’ use. Behind the scenes, J.C. Penney will get two seats on the Martha Stewart board, and MSO will offer a 25-cent special dividend.

The venture is one of the first by new J.C. Penney CEO Ron Johnson, who was brought in from Apple (NASDAQ:AAPL) to help “re-imagine” the struggling retailer. So far, the announcement has rankled at least one rival — Crain’s reported Wednesday that Macy’s (NYSE:M) was reviewing its stance with Martha Stewart, as the retailer currently peddles hundreds of her branded products.

While JCP shares gained less than 1% on the news, similarly hurting women’s clothier Talbots (NYSE:TLB) saw a much more substantial surge in its shares Wednesday after Tuesday’s disclosure of private equity firm Sycamore Partners’ $3 per share bid for the company.

TLB stock jumped almost 70% on news of the buyout, which would be worth about $205.2 million. It was a rare bit of sunshine for Talbots, which has posted three quarterly losses in its past four, and three annual losses in its past four. Even at Wednesday’s finish of $2.65, TLB shares are far from their glory days, off almost 90% from their 2001 heyday and down 70% year-to-date.

Three Up

  • Men’s Wearhouse (NYSE:MW): Up 19.57% ($5.32) to $32.51.
  • Groupon (NASDAQ:GRPN): Up 9.93% ($1.91) to $21.15.
  • Micron Technology (NASDAQ:MU): Up 7.26% (41 cents) to $6.06.

Three Down

  • Clearwire (NASDAQ:CLWR): Down 8.8% (22 cents) to $2.28.
  • Halliburton (NYSE:HAL): Down 6.1% ($2.17) to $33.40.
  • Frontier Communications (NYSE:FTR): Down 3.8% (21 cents) to $5.38.

As of this writing, Kyle Woodley did not hold a position in any of the aforementioned stocks. Check out our list of previous IP Market Recaps.

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