Martha Stewart Living Omnimedia Inc. last week reported a fourth-quarter loss of $7.3 million and predicted an even larger loss for the first quarter of this year.

And there are questions about how Stewart will work with the company's strong new chief executive, Susan M. Lyne, a widely respected former ABC entertainment head who is moving to put her own mark on the company.

This week, the company's publisher and executive vice president, Suzanne Sobel, said she was quitting to pursue "new challenges."

When Stewart officially returns to work, she will take the title of "founder."

Although she could technically reassume the chief executive job, legal experts say she is unlikely to do so because she still faces a Securities and Exchange Commission civil suit that seeks to bar her for life from serving as a director at a public company and limit her ability to serve as an officer.

Martha Stewart

Paul Argenti, a professor of corporate communication at Dartmouth's Tuck School of Business who worked with Stewart as a consultant in the early 1990s, was blunt with his concerns about how Stewart and Lyne would work together.

"I cannot imagine those two people are going to get along," Argenti said. "It happens in companies I work with all the time, where the person in charge won't allow a really good executive to shine because they fear that the spotlight will be taken off them. And Martha is more like that than anyone I've ever met."

In an interview, Lyne dismissed such concerns, saying she has grown personally close to Stewart through multiple prison visits and is confident they will have a cordial working relationship.

Although they have no formal agreement about their respective duties, Lyne said she expects Stewart will focus on big-picture strategic planning.

"At the same time, she has two big TV shows that are going to demand a lot of attention and focus because she clearly wants them to be great," Lyne said.

Not everyone agrees that Stewart's full-tilt comeback campaign will necessarily be a "good thing" for the company. Firing people on her spinoff version of NBC's "The Apprentice" might not do much to counter Stewart's reputation as a haughty ice queen, some marketing experts and analysts who cover the stock say. And the company won't make much money directly from the show.

Argenti called the "Apprentice: Martha Stewart" deal "exactly the worst thing she could do."

"It highlights all the worst aspects of her personality for everyone to see," he said. "It puts her right back in a situation where people can find a reason to dislike her again. And it does nothing for the company for her to be involved in that show. Zero."

According to the company's most recent proxy statement, Stewart owns about 30 million shares, or about 61 percent of the total number of shares outstanding.

The company's stock has soared in advance of Stewart's release, closing yesterday at $33.95, up $1.91, after falling as low as $5.26 on Oct. 9, 2002, when Stewart's ImClone stock sale scandal was in full flower.

But some Wall Street analysts and professional investors view the shares as overhyped and overpriced.

Some say the stock has been boosted by a "short squeeze" in which investors who bet that the stock they had borrowed would fall have been forced to buy shares to limit their losses.