Martha Stewart's new TV show is a hit with investors. But whether it will be a similar success for her company's bottom line is still up in the air.

The show,

trumpeted Wednesday at a flashy press conference, is basically an updated version of the syndicated program that the company suspended earlier this year amid bad ratings, critics say. Even if the program proves to be a success,

Martha Stewart Living


may see little if any windfall from it, they warned.

"They're very good about announcing deals aren't they?" said Scott Rothbort of LakeView Asset Management, a contributor to's

sister site

Street Insight

. "This stock is going to be trading off news and hype, not fundamentals. I continue to believe that."

Rothbort sold off his long position in Martha Stewart Living on Thursday.

In an interview with

, Martha Stewart Living CEO Susan Lyne declined to talk about what financial benefit the company will see from the new show, saying only that Stewart's fee for it will be "nominal." The new show is significantly different from Stewart's previous one and has all the makings of a ratings success, she said.

"There are no sure things," said Lyne, a former executive at


(DIS) - Get Report

ABC television unit. But with daytime television dominated by look-alike talk shows, a how-to show hosted by Stewart should stand out, she said. "I think we can ... deliver some real value to viewers," she said.

Investors seemed to be buying that message. Martha Stewart Living's stock closed regular trading on Thursday up $1.48, or 6.1%, to $25.91. That rise came after a 6.8% gain on Wednesday.

Martha Stewart Living has struggled since allegations that Stewart engaged in a questionable stock trade came to light two years ago. She was

convicted earlier this year of lying to prosecutors and obstruction of justice in relation to the trade. Stewart still faces civil insider-trading charges.

With Stewart's legal troubles dominating the news, her company has seen its fortunes decline. Revenue has steadily decreased, and the company's bottom line has bled red ink as advertisers have abandoned the company.

In the wake of her conviction, the company put its

Martha Stewart Living

television show on hiatus. The show's ratings declined as a number of stations and networks canceled it and others moved it into unfavorable time slots.

While the company's flagship magazine title -- also called

Martha Stewart Living

-- has historically driven its revenue, much of the hope for the company's rebound has come from its new television efforts. In September, Martha Stewart Living signed a deal with


producer Mark Burnett to develop a number of new television projects. Among those in development is a prime-time reality show staring Stewart.

Stirring the Pot

That deal caused a stir among investors, and the company's stock has more than doubled since it was announced. But the details of that show are still being worked out, Lyne said. Although it's possible that the program will debut next fall, that also hasn't been worked out, she said.

Instead, the company announced the successor to its

Martha Stewart Living

show. Like its predecessor, the new syndicated show will focus on Stewart doing "how-to" kitchen and craft projects. Unlike the previous show, the successor will be taped in front of a live audience and will incorporate audience interaction.

While Stewart projects an image of being the ultimate perfectionist, the program will show that she too makes mistakes and will seek to humanize her, Lyne said.

"She's a very different character from the figure that seemed do everything so perfectly and so seriously on her

previous show," Lyne said, adding that the addition of a live, interactive audience should freshen up the show.

"In an odd way, this hiatus for the show turned out to be an opportunity to rethink what the next iteration of the Martha Stewart show would be," she said.

But not everyone is convinced that the show will be a success or that the company will benefit from it.

Same as It Ever Was?

The new syndicated show will have a long way to climb to get out of the ratings morass of its predecessor, said Dennis McAlpine, who covers the company for McAlpine Associates. As much as the company sees this as a new and improved show, it's not that much different from the old one, he said. And the audience interaction part might be more of a problem than a benefit, he said.

"Are we to believe that just because Ms. Stewart has spent time in jail, the ratings for the show are to jump to some huge new hit level? Let's face it, Ms. Stewart does not evoke thoughts of Oprah Winfrey or even Ellen Degeneres," McAlpine said in a note issued late Wednesday.

"Mark Burnett may be a programming genius, but all of those skills -- and more -- may be needed to pull the ratings up to an acceptable level."

Further, McAlpine questioned what kind of financial benefit the company would receive from the deal. Under Stewart's new contract, which she signed in September, the company assigned to her much of the benefit from the potential prime-time show, and gave her a $200,000 retainer to be its on-air talent.

Martha Stewart Living also agreed to pay her the "fair market value" to appear in any new programs for the company in addition to the prime-time show. The company also agreed to pay her 10% of the adjusted gross revenue it gets from selling any rerun rights to the shows. Production companies often generate the bulk of their profits from reruns, not the initial runs of their shows.

"The financial details on the

syndicated show have not been provided yet, but if they follow the same pattern as the agreement with Mark Burnett, the benefit to MSO, the company, is believed to be quite limited," McAlpine said. (His firm doesn't do banking with Martha Stewart Living.)

Lyne said only that Stewart was not treating the syndicated show as a "talent deal."

"While I imagine there will be a fee, it will not be anything like the fees that a Rosie or an Ellen gets," she said.

The company could see a benefit from the new shows either directly or from increased sales of its other products, analysts say. But as of now, the company has little in the way of real results to show investors, they say.

"The proof is still in the pudding," said Rothbort. "They still have to execute."

Martha Stewart Living's stock price has been detached from the company's actual performance in recent months. While other announcements may push the stock up further, some investors and analysts believe the safe move is to sell off now.

"We see no justification for the recent run-up in MSO stock," said McAlpine. "If one owns the stock despite our prior protestations, we suggest you sell it immediately and say thank you to the stock gods."