The mess at Starbucks may get even messier
Starbucks has been fighting internal battles for a while. Now it has a powerful outside investor to contend with, too. The Wall Street Journal reported Friday that Elliott Investment Management has built a big stake in the company and is pushing its management behind the scenes with ideas to boost its stock price. Of course, that piqued investors’ optimism and they bid the stock up 6.9% after the report.
Starbucks is a company whose problems are myriad. Its stock has been on the fritz for a long time — it’s down 12% since 5 years ago, even with the latest bump. It has been at the center of labor battles. Its sales are slumping so much it added its own version of a value menu. And it also just can’t seem to get rid of its founder, Howard Schultz.
Schultz essentially built Starbucks and ran it from 1987 to 2000. When the stock began to struggle after the Financial Crisis, he came back for a second stint and stuck around til 2017. Then he came back for a short third stint as CEO in 2022 before turning the reins over to current CEO Laxman Narasimhan. Earlier this year, Schultz got frustrated with how Starbucks was operating and hopped on LinkedIn to write an open letter on how to fix things, criticizing current leadership for not spending “more time with those who wear the green apron.”
Starbucks has a number of fires to put out. Now it’s going to spend a lot of bandwidth dealing with an activist investor. Buckle up.
Starbucks is a company whose problems are myriad. Its stock has been on the fritz for a long time — it’s down 12% since 5 years ago, even with the latest bump. It has been at the center of labor battles. Its sales are slumping so much it added its own version of a value menu. And it also just can’t seem to get rid of its founder, Howard Schultz.
Schultz essentially built Starbucks and ran it from 1987 to 2000. When the stock began to struggle after the Financial Crisis, he came back for a second stint and stuck around til 2017. Then he came back for a short third stint as CEO in 2022 before turning the reins over to current CEO Laxman Narasimhan. Earlier this year, Schultz got frustrated with how Starbucks was operating and hopped on LinkedIn to write an open letter on how to fix things, criticizing current leadership for not spending “more time with those who wear the green apron.”
Starbucks has a number of fires to put out. Now it’s going to spend a lot of bandwidth dealing with an activist investor. Buckle up.
