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Mitt Romney vouched for low price on Staples stock that traded 10 times higher a year later
Boston Globe ^ | 10/25/2012 6:23 PM | Callum Borchers

Posted on 10/25/2012 7:31:05 PM PDT by Red Steel

CANTON, Mass. — Mitt Romney testified under oath in 1991 that the ex-wife of Staples founder Tom Stemberg got a fair deal in the couple’s 1988 divorce, even though the company shares Maureen Sullivan Stemberg received were valued at a tenth of Staples’ stock price on the day of its initial public offering only a year later.

At the time the Stembergs split, Romney suggested, there was little indication that Staples’ value would soon skyrocket.

Romney’s testimony in a post-divorce lawsuit brought in 1990 by Sullivan Stemberg was unsealed on Thursday in Norfolk Probate and Family Court at the Globe’s request. Sullivan Stemberg sued unsuccessfully to amend the couple’s financial agreement after Staples went public in 1989 and closed its first day of trading at $22.50 per share, 10 times the value she had received.

Stemberg left his wife in February 1987, and the divorce was finalized in July 1988. Before the official split, the couple negotiated an agreement in which Sullivan Stemberg got 500,000 shares of Staples stock, which Stemberg valued at $2.25 per share.

Sullivan Stemberg also kept the couple’s Dedham home, worth $690,000 at the time, and in February 1988 sold 175,000 shares of Staples stock at $2.25 per share to pay off the mortgage. She sold another 80,000 shares two months later, at $2.48 per share.

“In my opinion, that’s a good price to sell the securities at,” Romney, now the Republican nominee for president, testified in June 1991.

(Excerpt) Read more at boston.com ...


TOPICS: Extended News; Politics/Elections
KEYWORDS: axelrod; bostonglobejoke; gloriaallred; obama; obamadesperate; octobersurprise
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Is this it? Waaaaaah and yawn Boston Globe, Gloria Allred, and Stemberg.
1 posted on 10/25/2012 7:31:06 PM PDT by Red Steel
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To: Red Steel

Uhhhh..............and?????????????? Idiots huh?

Helping keep mankind warm for 65 years.


2 posted on 10/25/2012 7:34:57 PM PDT by rktman
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To: Red Steel

It may be nothing, but just wait.... it’ll be the lead in story for most of the MSM tomorrow including “the view”....


3 posted on 10/25/2012 7:35:22 PM PDT by Sleeping Freeper
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To: Red Steel

OMG! Romney made a poor stock pick!


4 posted on 10/25/2012 7:35:42 PM PDT by outofstyle (Down All the Days)
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To: Red Steel
So let me get this straight. If she has held her 500,000 shares another year she would have had 10 times as much money. WTF is she complaining about? Under stating the value of the stock would reduce Tom Stemberg's wealth, but would have also made the amount of stock Mrs. Stemberg received appear as a lower value in the settlement.

She chose poorly and that is the breaks of stock trading. The reality is that she blew 80% of her settlement on dragging him back into court and the ensuing defamation lawsuit brought against her by Tom Stemberg and his new wife.

5 posted on 10/25/2012 7:38:04 PM PDT by USNBandit (sarcasm engaged at all times)
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To: Red Steel

Well, obviously Romney was not wearing his Genie hat. You know, the one that confirmed that staples stock would rise in a year, so don’t sell you dumb t*at!


6 posted on 10/25/2012 7:38:33 PM PDT by KittenClaws (You may have to fight a battle more than once in order to win it." - Margaret Thatcher)
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To: outofstyle

This is desperation at its finest. No big ideas here. No cocaine use. No DUI. No perjury charges on the books.


7 posted on 10/25/2012 7:40:00 PM PDT by ghannonf18
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To: Red Steel

Stupid.


8 posted on 10/25/2012 7:40:49 PM PDT by comebacknewt (Newt (sigh) what could have been . . .)
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To: Red Steel

Anything to take the focus off the Libya scandal.


9 posted on 10/25/2012 7:41:15 PM PDT by dragonblustar (Allah Ain't So Akbar!)
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To: Red Steel

Maybe she should have invested in cattle futures.


10 posted on 10/25/2012 7:41:42 PM PDT by unixfox (Abolish Slavery, Repeal The 16th Amendment!)
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To: Red Steel

Who did she sell the stock to?

That’s the guy that made out.


11 posted on 10/25/2012 7:42:14 PM PDT by Venturer
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To: Red Steel

I could be wrong, but would any kind of revelation to price, or advance knowledge of an increase in it’s valuation, be akin to insider trading??? I think Romney would be in deeper s**t if he actually did if he actually did make any kind of claim of an increase in value.


12 posted on 10/25/2012 7:42:56 PM PDT by ObozoMustGo2012
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To: Red Steel

Wasn’t the IPO price of Facebook’s stock raised several times before it even hit the first day of sale? And where is it today?


13 posted on 10/25/2012 7:46:08 PM PDT by a fool in paradise (Obama likes to claim credit for getting Osama. Why hasn't he tried Khalid Sheikh Mohammed yet?)
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To: Red Steel

look a squirrel


14 posted on 10/25/2012 7:47:03 PM PDT by italianquaker (The 47 pct need to pay their fair share)
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To: outofstyle

she should have bought cattle futures


15 posted on 10/25/2012 7:47:13 PM PDT by bigbob
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To: Red Steel

She walked away with 5 million. She had nothing to do with Staples value then, or it’s later success. Typical.
But revenge is coming. Woman fill law schools, medical schools, and top corporate positions.
More often than ever, they marry blue collar guys. When men start getting payouts just for sharing a bed with someone who earns exponentially more than them,,watch for a sudden change in the laws.


16 posted on 10/25/2012 7:48:01 PM PDT by DesertRhino (I was standing with a rifle, waiting for soviet paratroopers, but communists just ran for office.)
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To: Red Steel

Pre-IPO stock is given a nominal value, which Mitt gave. I worked for a company that gave me pre-IPO options at a dollar a share.

This will be spun big time as an example of the War On Women and how Romney conspired to defraud this poor waif of millions.

Facts won’t matter in a coordinated media rollout by the Rats.


17 posted on 10/25/2012 7:48:47 PM PDT by DBrow
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To: Red Steel

How is it anyone else’s fault if she sold the stock early instead of holding onto it until the value went up?


18 posted on 10/25/2012 7:49:15 PM PDT by JediJones (Vote NO on Proposition Zero! Tuesday, November 6th!)
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To: outofstyle
She sold in 1988, the company went public in 1989 and Romney testified in 1991. So his statement was not a stock pick.

She decided to sell a large block of a highly illiquid stock just months after the 1987 crash, rather than waiting until it was public, liquidly traded and in the midst of an eventual market recovery.

He was right - at that time, in those circumstances, she likely couldn't have done much better.

19 posted on 10/25/2012 7:49:40 PM PDT by wideawake
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To: Red Steel

This is an interesting contrast to an earlier story that showed the exact opposite. Don’t know if it is just spin or if the FR thread was being typically positive.


20 posted on 10/25/2012 7:50:53 PM PDT by paul544
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To: Red Steel

Big Bird!

Big Bird!

Binders of women!

Damn, how would that be?


21 posted on 10/25/2012 7:51:11 PM PDT by glock rocks (Optimist? Pessimist? Naw, I'm an Awesomist - There's a dragon in that glass!)
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To: Red Steel

Huh?
The ditz could have asked for STOCK instead of CASH, why did she not do this?
Her shares would then have gone up, like everyone elses.


22 posted on 10/25/2012 7:51:40 PM PDT by Kansas58
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To: Red Steel

If Romney had testified stock was worth 10 times more...then Staple’s wife would have gotten 1/10 as many shares. She should thank him!


23 posted on 10/25/2012 7:52:58 PM PDT by icwhatudo (Low taxes and less spending in Sodom and Gomorrah is not my idea of a conservative victory)
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To: ObozoMustGo2012
Read the details of the story.

He was testifying in 1991 about the valuation of Staples stock in 1987. There's nothing even closely resembling "insider trading" when you make a statement (subjective or otherwise) about shares of stock in a company four years after the date of a transaction.

24 posted on 10/25/2012 7:53:19 PM PDT by Alberta's Child ("If you touch my junk, I'm gonna have you arrested.")
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To: wideawake

She was stupid and greedy. It’s Romney’s fault


25 posted on 10/25/2012 7:53:35 PM PDT by Aria ( 2008 wasn't an election - it was a coup d'etat.)
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To: USNBandit

26 posted on 10/25/2012 7:53:39 PM PDT by Bratch
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To: Red Steel

There is no there there. sheesh, he doesn’t even need Trump for this one.


27 posted on 10/25/2012 7:54:17 PM PDT by Vince Ferrer
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To: Red Steel

This woman got a 5 million $ settlement. Not bad compensation if you ask me. Oh, by the way, stock market values change. No one forced her to sell her shares immediately. Basically, she was greedy and wanted an immediate payoff.


28 posted on 10/25/2012 7:55:13 PM PDT by 3Fingas (Sons and Daughters of Freedom, Committee of Correspondence)
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To: USNBandit

Yeah, if they had overrvalued the stock, he could have made out better theoretically. If he had 2 million in “undervalued” stock and a million in other assets, he could’ve given her 75% of the stock to give her half of his wealth.

If they instead said his stock was worth 10 million, then he’d only have to give her 55% of the stock to account for half of his total wealth.

So he probably lost more shares in the early settlement than he would have if the settlement had happened after the IPO.


29 posted on 10/25/2012 7:55:28 PM PDT by JediJones (Vote NO on Proposition Zero! Tuesday, November 6th!)
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To: Red Steel

If Mitt undervalued it, presumably she then received more of it if the decree was about giving her a fair share. I presume the judge was awarding her a set dollar value. It would take more share of an undervalued stock to cover the award. She squandered Mitts generosity.

Facebook was valued at $38/share. How did that work out on IPO day. One cannot lie when one is guessing.


30 posted on 10/25/2012 7:56:03 PM PDT by ALPAPilot
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To: Kansas58

The point wasn’t to get the court records unsealed, the ex-wife wants the ban on her talking lifted so she can make sh*t up.


31 posted on 10/25/2012 7:56:03 PM PDT by Mean Daddy
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To: icwhatudo

For example: If she got x amount of shares to = 1 million

At $1 a share she would get 1 million shares
At $10 a share she would get 100k shares

So when the price went up 10x a year later, would she be happier owning 1 million shares or 100k shares?

Am I off base here? Sounds like she should thank Romney.


32 posted on 10/25/2012 7:56:13 PM PDT by icwhatudo (Low taxes and less spending in Sodom and Gomorrah is not my idea of a conservative victory)
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To: Red Steel
"But on April 28, 1989, barely a year after Sullivan Stemberg sold more than half of her shares on the premise that they were worth less than $2.50 apiece, the company made its initial public offering at $19 per share and ended its first day at $22.50.



Sullivan Stemberg’s 245,000 remaining shares were worth $5.5 million, but she had lost out on millions more by accepting low sale prices in 1988."

---------------

this is the world we live in under obama and the rats...

- if you're in credit card debt over your head its the credit card companies fault....

- if you can't afford you're mortgage, its the mortgage companies fault...

- if your mortgage is underwater its' the realtors fault...

- if you sell stock and the price goes up later on, its someone elses fault...
33 posted on 10/25/2012 7:56:29 PM PDT by God luvs America (63.5 million pay no income tax and vote for DemoKrats...)
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To: unixfox

har


34 posted on 10/25/2012 7:56:33 PM PDT by thinden
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To: Red Steel

Pre-IPO price a year earlier when company fundamentals were shaky. He or Bain didn’t buy all the stock he could have at the time either.

Nothing to see here Gloria, move along. Oh wait, you knew that....


35 posted on 10/25/2012 7:57:02 PM PDT by Ripliancum (Let all bitterness, wrath, anger, clamour, and evil speaking, be put away from you. -Eph. 4:31)
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To: Red Steel

Um, let’s see. She’s given the stock in the settlement valued at $2.25 a share. She then sells it at 2.25 a share. I don’t see that Mitt would have to be Karnak to years later determine that it was worth 2.25 a share when she got it. I could have done that! Don’t see where anybody forced her to sell at that price.


36 posted on 10/25/2012 7:58:00 PM PDT by Cincinnatus
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To: outofstyle
No, the complaining woman sold her Staples stock early before it valued upwards.

Romney had nothing to do with the value or the sale. Later the woman came back at her ex to claim more financial support based on her crappy decision.

Now allred is blaming Romney. Of ourse the media will love this.

37 posted on 10/25/2012 7:58:11 PM PDT by pfflier
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To: wideawake
She sold in 1988, the company went public in 1989 and Romney testified in 1991. So his statement was not a stock pick.

She decided to sell a large block of a highly illiquid stock just months after the 1987 crash, rather than waiting until it was public, liquidly traded and in the midst of an eventual market recovery.

He was right - at that time, in those circumstances, she likely couldn't have done much better.

Exactly. According to this article, Romney didn't testify under oath in an attempt to undervalue her divorce settlement. She got a divorce settlement. She sold too early. She then tried to renegotiate the divorce settlement AFTER everyone knew what actually happened with Staples. THIS is the point that Romney got called in to testify. The only story here is that Gloria Allred is a hack who is trying to distract everyone.

38 posted on 10/25/2012 7:59:51 PM PDT by lgwdnbdgr
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To: pfflier

Somebody please prove that Romney was incorrect that on the dates she sold her pre-IPO stock, the stock was worth something other than what she got.


39 posted on 10/25/2012 8:03:56 PM PDT by RightStuff1
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To: pfflier
I'm confused as to why Romney is involved at all in this couples divorce proceedings. If anything his a tangential witness. They divorce in 1988, he testifies in 1991.

Where's the beef?

How is Romney to "blame" for anything?

The leftists are really getting desperate.

And more pathetic by the day.

40 posted on 10/25/2012 8:05:25 PM PDT by boop (I weary of the chase. Wait for me. I shall be merciful and quick. ...)
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To: ObozoMustGo2012

I agree. He didn’t advise her to sell her stock before it went up. She chose to do so. The price of the stock at the time of the divorce was probably not worth much. Romney probably hoped that the stock would be worth more in a year especially if he was owning any shares but to say that he influenced the outcome of her situation in reference to the stock seems a stretch. She chose to sell and loss out on a super windfall!


41 posted on 10/25/2012 8:08:14 PM PDT by classified
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To: Red Steel

Check out the online comments at the end of this article. The Boston Globe has been universally scorned for this garbage, and their obvious hyperpartisan Obama proactiveness, as opposed to their ridiculous claim of being a part of the “objective news media” that simply reports the news.

Though I’m sure the reservoir of subscribers willing to cancel their Boston Globe subscriptions has shrunk to an all time low with most of their remaining subscribers in the hard left camp, I bet they STILL get a few more subscriptions cancellations over this one!


42 posted on 10/25/2012 8:08:35 PM PDT by catnipman (Cat Nipman: Vote Republican in 2012 and only be called racist one more time!)
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To: USNBandit

She made the choice to sell her shares. The Globe somehow is trying to connect Romney to her bad choice. Wonder if she is gaining financially for being part of this current media charade.


43 posted on 10/25/2012 8:08:57 PM PDT by opentalk
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To: Red Steel
  I think this helps Romney. I'm not a fan of liberal Republicans, but even I see him a bit more favorably knowing that this is all she can come up with. Sadly for her, she has to return to Hades without earning that pitchfork she wanted so badly.
44 posted on 10/25/2012 8:10:12 PM PDT by Maurice Tift (You can't stop the signal, Mal. You can never stop the signal.)
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To: Red Steel

If this divorce occurred in 1988, Staples stock didn’t go public until 1989. In 1988, Staples was expanding and needed to solicit three more rounds of financing from the investment banking community, raising a total of $32 million.

Trying to value a company’s stock at this stage would have been a little sketchy because most of the valuation would have been tied up in venture capital. Obviously, the company was cash strapped.

http://www.fundinguniverse.com/company-histories/staples-inc-history/

Thank you freeper rollin_stone for this information.


45 posted on 10/25/2012 8:10:33 PM PDT by BlessingsofLiberty (Remember Brian Terry...)
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To: Red Steel

In my best Breitbart tribute...”so?”


46 posted on 10/25/2012 8:12:01 PM PDT by SueRae (See it? Hell, I can TASTE November from my house!)
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To: Red Steel

this is a crock the ex wife also sued her supposed atty saying they advised her to sell the stock to pay her atty fees...also i read Romney was asked if he exercised all the options he had to buy the stock and he said no it could fail as easily as go sky high..

the woman involved is no newcomer to bitterness...IIRC she was also sued for defamation by her ex and his new wife...

Allred apparently failed to investigate her client and consider her credibility..either that or she didnt care just wanted to make news...


47 posted on 10/25/2012 8:12:31 PM PDT by rolling_stone
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To: Red Steel

http://www.fundinguniverse.com/company-histories/staples-inc-history/

In February 1989 Staples introduced its Private Label products—generic office supplies at exceptionally low prices. This strategy was one that Stemberg had first implemented in the grocery business, when he introduced company-label groceries for Star Markets. In April Staples sold stock to the public for the first time, raising $37 million to fund its further expansion. By the end of that month, the company’s sales had reached $120 million. Despite this strong growth in revenue, Staples had yet to make any earnings, although the company did turn in its first profitable quarter at the end of January 1989. Overall, losses since Staples’ founding had reached $14.1 million.

These losses were caused by the high cost of the company’s start-up and expansion as well as the strong competition the company faced. As Stemberg had predicted, Staples had quickly been joined in the office supplies market by a host of imitators around the country. In mid-1989 the company slipped to second place in revenues behind Office Depot Incorporated; Office Club was making a strong showing in California; and retail giants Kmart and Ames were also deliberating a move into the stationery field. To counter these threats, Staples continued its rapid pace of new store openings. By the end of the year the company was operating 38 stores, and it had racked up sales of $182 million.


48 posted on 10/25/2012 8:15:39 PM PDT by Raycpa
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To: pfflier
Now Allred is blaming Romney. Of ourse the media will love this.

Agreed. And though I don't have much faith in "the electorate" I'm pretty sure, they will yawn.

49 posted on 10/25/2012 8:16:19 PM PDT by outofstyle (Down All the Days)
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To: USNBandit

That was my thinking. If Mitt had quoted a higher value for the stock, she would have gotten LESS stock because the targeted value payout value would have been reached at that “presumed” share price.

In other words, he did her a favor by quoting a lower price and thus making sure she got more shares.

Nobody told her to sell off those shares early. She could have very easily held on to them and made ten times as much. She didn’t. Tough cookies, that’s the way the market works.

If anyone has a cause to bitch it’s her husband, who was “screwed” by Mitt because he ended up giving her far more shares than she would have otherwise gotten if he had quoted a higher price.

So tell me, what exactly, is she bitching about?


50 posted on 10/25/2012 8:18:37 PM PDT by Ronin (Dumb, dependent and Democrat is no way to go through life - Rep. L. Gohmert, Tex)
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