Shares in Starbucks fall as investors face new reality with fresh CEO

by | 5 Jun, 2018

 

Shares in coffee giant Starbucks fell by 1.03% to below $56 in early trading on June 5th as a new chapter began at the firm and investors adjusted to a new reality. 

The CEO of Starbucks Howard Schultz is set to officially leave the business after 36 years of service.

Schultz, who announced at the end of 2016 that he would be retiring, is to relinquish his seat on the board of directors on June 26th. The announcement back then was enough to put a significant dent in the Starbucks share price, which has struggled greatly over the last year, notching a 9.23% loss.

Schultz’s leadership saw Starbucks grow from 11 stores to over 28,000, while he is also credited with getting the company back on track after a dismal 2008 performance.

The reason for the lack of share price gains is that investors worry that the new CEO Kevin Johnson (another board member) may not offer the same kind of innovative leadership that the company will need to navigate through tougher circumstances in future, as more people move away from the high street in favour of online shopping, meaning less foot traffic in Starbucks outlets.

Schultz, who has been spoken out about both social and political issues, has attracted speculation that he will run for office, potentially as a Democratic presidential candidate in 2020. In a memo to staff he said: “I’ll be thinking about a range of options for myself, from philanthropy to public service, but I’m a long way from knowing what the future holds.”

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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