Somebody seriously should call Martha Stewart and give her a stock tip; tell her to sell her own stock. Martha Stewart Living Omnimedia (MSO) reported 2nd quarter numbers and the results do little to explain why the stock, at $28, is worth $1.43 billion.

Sales for the quarter were $46 million, broken down as follows: publishing (69%), merchandise sales (22%), internet sales (5%), and television programming (4%). Amazingly, MSO lost $33 million in the quarter, hardly a profitable business model. Even if you exclude items like equity compensation, and focus just on product costs as well as selling, general, and administrative expenses, MSO lost $11 million on $46 million sales.

Clearly investors are focused on the upcoming Apprentice show for added profitability. However, given that Martha's current shows are contributing only 4% of sales, investors would be correct in asking how much the new NBC series could possibly materially add to earnings.

Can anyone out there please explain how this company is being valued at more than $1.4 billion? Until I can understand such a justification, I'd be betting against MSO shares.