[Lisovicz:] Big news from the Martha Stewart trial this week was the defense that wasn't, or at least it might have looked that way. Joining us with more on that and a look ahead as to what is next as the trial winds down, is CNN's Mary Snow. Hi Mary.
[Mary Snow, Cnn Correspondent:] Hi there Susan. You know, before jurors even get this case they won't have to consider the most serious charge against Martha Stewart. The judge in this case dropped the securities fraud charge which carried a maximum of ten years in prison. This is not a big surprise. This is a charge that was based on Martha Stewart making statements in June of 2002. Prosecutors saying she was trying to prop up her own stock by proclaiming her innocence. In terms of what happened this week, the defense presented and rested its case in just 43 minutes with one just witness. The defense signaling confidence behind their brief defense strategy, and for not calling Martha Stewart on the stand. Legal experts point out though, that it carries a risk. It puts extra pressure on Stewart's defense attorney to make his compelling case in closing arguments. And the defense has been trying to do that by pointing out that this case hinges on circumstantial evidence. And really what is at the heart of this case is did Martha Stewart and her stockbroker have an agreement to sell Inclone stock in late 2001 because of an agreement to sell once it hit $60? The government says no such agreement existed. And it's their burden of proof to prove that it didn't exist. The star witness, Doug Faneuil a big part of this case, said he handled the trade. There was no such agreement. But the defense has argued that Faneuil was on vacation when this agreement was reached and he wouldn't have known any way. The co-defendant in this case, Peter Bacanovic also did not testify. Part of the case against him involves ink. His proof that there was an agreement was a sheet with at 60 notation listed next to Inclone stock. But the government brought on an ink expert to say that that notation was made with a different pen than the rest of the page. All part of the evidence that the jury will have to consider. Closing arguments are set to take place Monday and Tuesday, and then the judge has told the jury she will instruct them on Wednesday. Back to you guys.
[Serwer:] Time for our "Stock of the Week." This Wednesday the Walt Disney Company will hold its annual meeting, but you might as well call it a showdown, that's because
[Christine Romans, Cnn Correspondent:] Pirates of the Caribbean is the movie, Pirates of the boardroom is what is happening at Disney right now. Michael Eisner on the hot seat. Next week we will get a good idea of just how many shareholders are going to essentially vote against his leadership at Walt Disney. He has been under the gun for some time now, and the list of shareholders expressing dismay at his leadership is growing. Calpers, the nation's largest pension fund, Calsters, also number three-pension fund. You have other states lining up. The New York Comptroller, Institutional Shareholders Services, and Glass Lewis & Company. Glass Lewis is an independent proxy service that said essentially, the company gets a C for pay for performance. It needs to make more ground headway in better corporate governance and that leadership there needs to change. At the same time you have a hostile bid from ComCast. So the board, the shareholders of Disney have a lot of work ahead of them.
[Lisovicz:] And Christine, you and I, we all remember quite vividly when Calpers came out and denounced Dick Grasso NYSE and called for his head. He had withstood a wave of criticism. But within 48 hours, he was gone.
[Romans:] These are important shareholders. Together they count for some two or three percent of the outstanding shares. And 30 percent a Disney source says they expect maybe 30 percent of the shares that are voted next week will be voted against Michael Eisner.
[Cafferty:] Have they reached the point, this is just too big a distraction for the company? We don't talk about Disney anymore, we talk about Disney, and what are they going to do about Eisner? Disney, and who will replace Eisner? There's a point of which the company just cannot function with this kind of thing going on as a sidebar.
[Serwer:] I really think they have. There's no question in my mind, Jack and Christine, because all they're doing now is defending the CEO. All the CEO is doing is defending himself. Eisner has been lobbying pension funds, going out there. Even if he survives this, then he has to fend off the ComCast bid, that's in large part because of the weakness of the company because of his leadership. It's all about Michael Eisner. That's not a good thing.
[Romans:] One thing about Michael Eisner that is so amazing is over the past ten years alone, he has made more than $1 billion running this company. It comes out to something like $825,000 a month running this company.
[Cafferty:] For himself.
[Romans:] For himself. That is a lot of money. When you are paid that much money you start to come under fire from folks who want to see changes in corporate governance, want to see pay for performance. Disney, they honestly have came out today with a big full-page ad in the "New York Times," and said look, double digit returns for investors over the past year. We have earnings growth forecasts, double digit returns for the next couple of years, but California pension folks say we have a negative return for the past five years, that's all we care about.
[Cafferty:] Potentially this ComCast deal could be a blockbuster deal if it works. If the idea of marrying content to a system to deliver it, if that business model would prove to be good. Do you buy the stock based on what happens to Eisner, the fact he will probably be out at some point, and not in the to distant future, and maybe this deal goes together, and maybe it does work, unlike AOL and Time Warner?
[Romans:] The company dismissed it
[Cafferty:] That does not mean anything.
[Serwer:] I think the stock is a good value over the long terms. It's gone nowhere for a long time. Eventually this thing will sort itself out. They will get this company back on track. I think overtime, you are starting a low base. That's what it is all about in investing.
[Lisovicz:] You know why drama, because the annual shareholders meeting is in Philadelphia. Headquarters of what company?
[Romans:] It will be very interesting.
[Lisovicz:] ComCast!
[Cafferty:] They dismissed it out of hand perhaps because there probably isn't enough money on the table yet. But we'll have to wait and see. That's a look of the "Stock of the Week." There's much more ahead on IN THE MONEY as we continue. Coming up next, CPR for a dying marriage. Dr. Laura Schlessinger says she knows how to bring husbands and wives back from the brink. We will see if you agree with what she has to say. Later on, Reality TV puts on a suit and tie. We will look at "The Apprentice" and what it has done for Donald Trump. He is suddenly hot again.