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Starbucks (SBUX): Give Shareholders A Free Gift Card

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By Douglas A. McIntyre Published
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Any investor who held Starbucks (SBUX) shares last November and still has them today has lost about half of his or her money. SBUX hit $40.01 on November 16, 2006. After a downgrade from RBC today, the stock moved to $20.54.

There is a way to compensate those shareholders for their faith in the company. Give each one of them a free Starbucks charge card worth $20, prepaid by the company. At least the shareholders can go enjoy a beverage. It won’t really cost SBUX $20 because they mark up their drinks and other inventory so much. It might get the people to come back as paid customers, if they enjoy the experience.

The company has a float of 712 million shares, so there would be a one-time charge. Founder Howard Schultz could pass on taking his free cards and save the company some loot.

The RBC downgrade mirrored recent Wall St. reports on the stock. US expansion it too rapid. Same-store sales are being hurt. Commodities prices are moving up. McDonald’s (MCD) is taking premium coffee customers. The "hot" company is not "hot" anymore.

There’s nothing wrong with a little something extra for the poor shareholders. It is the holidays.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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