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Saturday, June 29, 2002

To: Martha Stewart From: Scott Johnson, The FuzzyGroup, Inc. Re: Your Current Predicament Date: 6/29/2002 Dear Martha, You don't know me and I don't have any particular feelings for you one way or another.  I am not "anti Martha" or "pro Martha".  I pretty much don't care that you even exist.  Still, as someone who has watched publicly traded companies completely make huge public relations blunders, I thought that I could give you some advice.  Here it is: Confess.  Even if you didn't do it.  Just Confess. For those who don't read the Wall Street Journal or the New York Times, here's a quick summary: Martha Stewart, the self styled demi goddess of decor, food and more, is or was a board member of a company called Imclone and a close personal friend of the CEO, Samuel Waksal.  The FDA decided NOT to review a new cancer drug of Imclone's, preventing them from releasing it.  This naturally hurt the stock dramatically. Mr Waksal and Ms. Stewart shared the same stockbroker at Merrill Lynch. Mr. Waksal tried to trade his stock shares through this broker, was denied the ability to do this as insider trading, and then tried to sell his shares elsewhere.  He has since been arrested and charged with insider trading. Ms. Stewart successfully traded her shares and pocketed approximately $227,000 dollars from the trades on December 27th.  Ms. Stewart and her broker are both claiming that she had left a previous sell order to trade the stock in Imclone automatically if it reached a certain point.  NO RECORD OF THIS ORDER EXISTS.  It's claimed that it was purely verbal.  Even experts on Wall Street admit that this is very unusual and unlikely as verbal orders can be easily forgotten and the brokerage firm is legally liable for the trade.  This gives the broker a huge incentive to enter all sell orders into the official records. While her broker's assistant, Douglas Faneuil, originally backed this story, he has now recanted and claims that he was forced to say this. The broker in question is not only an ex-employee of Imclone but also the broker for Mr. Waksal's daughter and family members. Alisa Waksal, the daughter, also sold stock in Imclone on December 27th. Martha Stewart, the broker, the assistant and the daughter are all under investigation right now.  Mr. Waksal is under arrest. Here are some stock links: Simple Stock Quote More Details on this Stock Here's the 3 month stock graph: Now, this is much, much worse; here's the 1 month graph: If you look at this closely, at the start of June the stock was at $19 per share.  Now, Friday 6/28/2002, it's at $11.47.  That's $7.53 per share lost or 39%.  So this one series of actions by Martha Stewart has wiped out 39% of the company's value.  Every single shareholder has lost 39% of his or her investment in Martha Stewart.  The current (Saturday 6/29) market cap, or overall valuation of the company, is $216,358,610 (link).  At the beginning of June it was $358,397,000.  This is a small loss to the shareholders of $142,038,390 -- that's $142 million dollars.  Now it can be argued that the shareholders haven't really lost anything today.  They only lose that money if when they sell the stock it hasn't recovered yet.  That's true.  But I've worked in a failing publicly traded company and I know how hard it is to get a stock price back up once it goes down quite a bit.  A lot of times it never does go back up.  And what then?  What about the people who invested in you?  Sure they knew there was risk but they didn't expect that you'd break the law (and maybe you didn't but it really looks like you did).  Now that the facts are out in the open, here's why you need to confess: I'd put the probability of your actual guilt at about 5 9s or 99.999%.  Your story doesn't hold water any longer and the executive assistant has confessed. What's worse for you is that Walsal, the CEO, has his daughter's future on the line.  My guess is that the government will let him plead guilty and let his daughter off the hook if he publicly states what actually happened. Blood is thicker than water -- if he's at all a decent human being -- then he'l do what any father would do and save his child.  If he even needed to perjure himself to save his daughter, he probably would.  So, in my analysis, you are going to go down no matter what. It's always better to admit you have a problem or made a mistake than to get caught.  We're all Americans after all and we love this stuff!  We eat it up when someone confesses.  It makes us all happy since it shows us that the rich, famous and powerful are human too.  And if you don't agree with this, look at how the public rallies around celebrities that do this regularly. With the current ethical debacle in publicly held American companies, Enron, Global Crossing, MCI World Com, Xerox, Adelphia, Anderson, Dynergy, ImClone, Qwest, Tyco and WorldCom/ MCI, the government has to finally step up to the plate and hold someone responsible.  You are a very public individual and one that I would contend is strongly disliked by the public.  Whatever government prosecutor / senator / congressman takes you down is going to get re-elected.  The public wants to see someone held responsible for these clearly illegal activities and you are a great candidate.  So I wouldn't count on any friends you have in government saving you. So, in closing, I think that the only chance you have to save yourself is to confess before you are prosecuted.  You'll probably pay a huge fine and perhaps some kind of light sentence.  This is far, far better than what will happen to you and your company if you are prosecuted, as you inevitably will be.  Maybe you could beat it in court, maybe not but you will see your stock price continue to decline while you are in court and that's not fair to the people that invested in you.  Do the right thing.  We all think you're guilty anyway and it's almost a fact that you are.  You have plenty of money and there are lots of examples of high profile folks who did some jail time and then made good -- look at Michael Milken for example. Confess Martha, Confess! Respectfully yours, J. Scott Johnson http://radio.weblogs.com/0103807/ http://www.fuzzygroup.com/ Bias Disclaimer 1: My mother owns shares in Martha Stewart, which is one reason I was interested, although I didn't know this until long after I had done the research.  She's planning on using this as a tax loss so she isn't particularly upset and I could care less.  Bias Disclaimer 2: I have made a few Martha Stewart recipes in the past and enjoyed them. 2:04:53 PM  Google It!  comment []   IM Me About This

My Two Favorite Hotels I'm not really sure how this came up but I ran across the urls to two of my favorite hotels recently.  These are just wonderful places to stay.  So if you are going to in San Diego or Amsterdam, you should look at: http://www.hoteldel.com/ -- The Coronado Hotel in San Diego http://www.holland-hotels.com/krasnapolsky.html -- The Grand Krasnapolsky Highly recommended. 12:51:16 PM  Google It!  comment []   IM Me About This

Mac OS X and Linux Enlightenment I spent some more time using Mac OS X (which I just can't stop calling "OS X" not "OS 10" -- the X to me stands for "*nix" -- am I the only one with this problem?) and using Enlightenment, a very cool *nix window manager.  For non *nix folks think of a window manager as a piece of software that controls the user interface at the look and feel and functionality level.  On Windos there is only a single window manager, the one that Microsoft provides.  On *nix there are, gosh, dozens?  They are all different and have lots of interesting features and very different approaches to look and feel.  Ever since I lost the ability to run Windows 2000 on my IBM ThinkPad, I've been trying out different Linuces (what is the plural of Linux?) and the latest is Mandrake.  While I do not yet have any network connectivity (PCMCIA seems to be beyond the default Mandrake install), I do have audio which Lycoris didn't give me.  And I kind of have DVD playback (I can get stills and listen to audio but I can't see the video move, kinda funny).  If anyone out there has a recommendation for Mandrake and LinkSys PCMCIA 10/100 combo modem cards / the LinkSys wireless card, that would be appreciated).  Anyway....  I set my default window manager to Enlightenment just for grins and giggles -- and I was really, really impressed.  Like OSX It's just much more serene to have a beautiful desktop.  I find that while I don't mind KDE since it's so close to windows, I also just plain DON'T LIKE it.  After a day using OSX and then a night using Enlightenment, the one comment that I would make about both is simple: Wow. Enlightenment is as beautiful in its own way as OS X is in its way.  Sample screen at startup: The more I play with OSX (and now Enlightenment), the more I am realizing just how important it is to see something pretty when you look at a screen.  I use a computer anywhere from 15 to 18 hours a day and I now find Windows just plain ugly as sin.  Sure I can go to the effort of getting some kind of Windows theming tool, changing settings and generally tweaking, but why should I have to?  OSX and Enlightenment are beautiful out of the box.  I don't have to work at it and that's really cool.  Why should I spend my time doing with Microsoft should have done?  My overall comment is that OSX and Enlightment just have class.  Yes Microsoft may rule the world but they lack this. Oh and XP?  I find that bloody well ugly.  It just feels wrong.  Everytime I use XP I find myself reverting it to the Windows 2K interface. Sample Enlightenment Themes / More Info: http://themes.freshmeat.net/browse/60/?topic_id=60 (themes) http://packages.debian.org/unstable/x11/enlightenment.html (good overview and even though it's Debian, it's not Debian specific) http://www.enlightenment.org/pages/main.html (home page) 7:43:03 AM  Google It!  comment []   IM Me About This

OSX and Software Pricing -- Why is Software So DAMN Expensive? One thing that contemplating the move to OSX for myself has made me realize is the huge investment in software I have.  I mean here's what I own: MSDN (that's everything MS makes and $1,000 per year minimum.  I have probably 500 odd CDs from them easy) Multiple copies of MS Office Norton Graphics Tools Everything else you can think of So I looked at the price of getting Office for my partner's iBook.  Here's the link from www.pcconnection.com: http://www.pcconnection.com/scripts/productdetail.asp?product_id=259224 It's $439.  Let's see I paid $1099 for the iBook.  That's 39.94% of the cost of the machine.  In 99 when I bought my 1st ThinkPad I paid almost $2,500 for it.  At the time Office 2000 for the PC was about the same price or $450 (I'd have to go back to receipts and expense reports).  That's 18% of the cost of the machine.  Now, don't get me wrong, I know all about software development.  I know how hard it is, etc.  Still it really seems to me like this software has to get a lot cheaper.  I mean Microsoft may have to pay programmers and maintain offices and such but Apple has to have FACTORIES !!!  What's going on here?  Am I the only person out here that sees a problem? Suggestion for Apple: Negotiate an upgrade program with software vendors for users to trade in their software.  For example: trade in your serial # for Office on the PC for Office on the mac. Recommendation for Everyone Else: Honestly ask yourself do you really need office?  Or is AppleWorks actually ok?  Or maybe it's time to look at Open Office / Star Office.  I have it on the PC (I haven't yet installed it on the iBook, it's on the infinitely long and rapidly growing Todo list).  Other, Random if You're Geeky: And if you are concerned about file formats then take a look at what George and I are doing on rOffice, www.fuzzygroup.com/roffice/.  It's an open source effort to break the MS monopoly on Office formats by using different people's copies of MS Office as a highly distributed conversion engine.  We could use a PHP programmer or two as well as another Python guy or two.  We've got initial file conversion implemented as well as a first cut at server to client interoperability using Jabber (and that's why I was coding PHP to Jabber stuff at 5 am a few days ago).  It's a standard source forge project as well as being hosted on our own servers.  Note -- George is a recognized Python expert as well as a computer science professor at Loyola.  My credentials are, well, practical if nothing else.   6:36:08 AM  Google It!  comment []   IM Me About This

From YaYoGakk: At Home DNA Testing! DNA testing from home?  How cool is that!  And talk about serendipity in browsing.  I was demonstrating news aggregators for a friend who's a yoga buff and wanted to show her a yoga site.  When www.newsisfree.com couldn't find me a Yoga related blog, I tried www.syndic8.com and found YaYoGakk (yes it's "yoga" but clearly they need to work on their indexing!).  Still it's YAGB (yet another great blog).  Very cool. Girlfriend pregnant? Do a DNA test first thing! Have you gotten the surprise of your life from your girlfriend or acquaintance and they say they are pregnant with your child? Before you let her put you through emotional torture (and your family and current children... as I did) and possible financial strain, PLEASE get a DNA test done! The actual test is painless and can even be done yourself! I used the DNA Testing Centre, Inc. in Texas. You can order kits on the web by going to: http://www.dnatestingcentre.com/order.htm. It's relatively inexpensive and is well worth it if you compare it to the devastation it can cause you and your family if the child is not yours. 6:19:34 AM  Google It!  comment []   IM Me About This

Extreme Programming (XP) XP is the current hot software development methodology.  I'm not usually a huge methodology fan but not only do I like it a lot, the people I really respect in this area like it even more than I do.  Here's a couple of cool links: http://www.extremeprogramming.org http://www.extremeprogramming.org/rules/pair.html (recommended) http://www.extremeprogramming.org/rules.html (recommended) Very cool stuff. NOTE: Thanks to Ben Schroeder for pointing out that I originally had the wrong link (.COM instead of .ORG).  Thanks Ben!  Very much appreciated! 6:13:26 AM  Google It!  comment []   IM Me About This