Starbucks’ CEO Bucks Trump – Investors Miss Market Run-Up

ELDER PATRIOT – How long will investors allow Starbucks’ C.E.O. Howard Schultz to destroy the value of their holdings by insisting his company reflect his opposition to President Trump? 

Schultz decided to make his personal disapproval for Donald Trump’s Executive Order, restricting immigration from seven countries where terrorism is particularly rampant, his company’s official policy.  In defiance of Trump, Schultz announced Starbucks would hire 10,000 refugees over the next five years.

Schultz never thought to make it his company’s policy to hire veterans but he remains committed to this knee-jerk decision that is costing him, and more importantly his investors, money.

Since Schultz’s in-your-face announcement Starbucks shareholders have watched their stock lose 2% of its value while the market has rushed ahead by 4% over the same period.

In dollars and cents Schultz has cost Starbucks’ shareholder close to $2 Billion during a period when the overall market has gained $2 Trillion.  No easy feat for a company that normally mirrors the economy’s good times.

It’s likely to get worse for Starbucks, too.  A poll by YouGov BrandIndex found that 20% of Starbucks’ previous friendly consumers will no longer buy their coffee from them.  Two days before Schultz threw his investors overboard, 30% of those polled said they were likely to buy their next coffee from Starbucks.  Today that is down to 24%.

How long will Starbucks’ shareholders allow Howard Schultz to diminish the value of their investment so that he can use their money to pay for his political statements?