Did Martha Stewart miss out on a big payday on ImClone stock?
Bristol-Myers Squibb's proposal to buy ImClone Systems for $4.5 billion brings back memories of the 2002 insider trading scandal that landed the domestic diva in jail and made ImClone a household word.
Stewart, who sold her ImClone stock in 2001—allegedly on a tip from ImClone founder Sam Waksal—got $58.43 a share, or a total of $229,513. She ended up being convicted in 2004 of lying to federal prosecutors about the circumstances surrounding the sale and spent five months in prison.
Now, Bristol-Myers Squibb is offering $60 for ImClone, so if Stewart had held onto her stock, she would've made a paltry $6,000 more seven years later.
But if she had waited until June 2004, when ImClone shares rose as high as $87, the payout would have been $112,223 more.
Stewart sold her stock allegedly on worries that the Food and Drug Administration was going to reject Erbitux, ImClone's colon cancer drug. Ironically, ImClone recently received positive reviews for the drug's efficacy on colon cancer and head and neck cancer. It is in the late stage of testing its effects on pancreatic cancer and may soon file with the FDA to investigate its effects on lung cancer.
What's more, former CEO Sam Waksal, who pleaded guilty to six criminal charges of perjury, securities fraud, bank fraud and obstruction of justice in August 2002, finishes his seven years and three months in prison next week.