Services
Is Fouled-Up Starbucks Promotion Responsible for Stock Price Dive?
Published:
Last Updated:
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive
compensation for actions taken through them.
That is possible, but ITG’s research does not get wide distribution, and Starbucks’ share volume had almost reached its daily average of 4.2 million before the first hour of trading even finished.
It is also possible that competitors Dunkin’ Brands Group Inc. (NASDAQ: DNKN) and McDonald’s Corp. (NYSE: MCD) are making some big moves. Not the case, as both are trading down, although neither is down as far as Starbucks.
That leaves yesterday’s fouled-up promotion of Starbucks’ $450 gift card from luxury sell Gilt.com. The promotion was supposed to launch last Friday with just 1,000 of the cards available. Starbucks ran a similar promotion last year with 1,500 cards at the majestic price, and it was a huge success. But Gilt posted the promotion a day early and before the website could remove the page, at least some of the cards were sold. Neither Gilt nor Starbucks would say how many were left.
Then the $450 cards started showing up for sale on eBay for up to double the price.
This has been an unmitigated public relations disaster for Starbucks. The customers who would have purchased the cards were among the company’s most well-heeled, and the luxury tag would have made a big splash again this year. Instead, the splash turned into a thud.
On its own, the fiasco probably shouldn’t have amounted to much. After all, only about seven people in the entire world really care about who got one of the cards as a gift and who got passed over by Santa.
But if Starbucks cannot run a decent promotion, can it really be capable of fighting it out with Dunkin’ and McDonald’s and winning? That is probably a stretch, but it’s not impossible.
Starbucks shares were down nearly 3% in the first hour of trading Tuesday, at $77.43 in a 52-week range of $52.39 to $82.50.
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.