Reality Check Halts Momentum at Martha Stewart

When it comes to Martha Stewart Living (MSO Quote), investors seem to be having trouble distinguishing the hope from the hype.

Is the struggling company poised for a turnaround, boosted by a potentially breakthrough television hit? Or has the latest buzz around the company obscured the fact that Martha Stewart Living is still reeling from the felony conviction of its namesake founder?

After the company's stock soared as much as 76% over the last two weeks, the skeptics' argument seems to be regaining the upper hand. The stock fell more than 10% Monday after dropping 3% on Friday. ...