Thursday, February 16, 2012

I Can't Believe CNBC Bought This Nonsense

Yesterday, Elliot Fineman of the Brady offshoot National Gun Victims (sic) Action Council was interviewed by Melissa Lee of CNBC. The interview centered on his group's boycott of Starbucks due to their policy of neutrality on gun issues. Fineman said the boycott would be ongoing. Of course, no mention was made of the Valentine's Day BUYcott by either Fineman or CNBC.

The story was presented in such a way as to give credence to Fineman's claims that the boycott would impact Starbucks. When  pressed on how it would be determined that his group's boycott was hurting Starbucks' bottomline, Fineman said that they were using self-reported data from their supporters on how much they were not spending at Starbucks.

Excuse me but self-reported data from their "followers" is not exactly reliable data from which to make projections. Fineman then says that their Monte Carlo simulations show that 90% of the time their boycott will have "a significant impact on the Starbucks' stock." Having used Monte Carlo simulation with retirement planning for years, I understand the results you get are very dependent upon both the constraints and the input data. In other words, if you put garbage in, you will get garbage out and that is exactly what they are getting.

It is very hard to prove a negative unlike a positive. The results from the BUYcott can be shown by an increase in sales for February 14th. However, a decline in sales over time would be hard to attribute to just the boycott by Fineman's group. There are many other factors like the state of the economy and competitors (like McDonalds) which come into play which are much more significant.

Fineman goes on to say that institutional investors who own 357 million shares of Starbucks' stock should be able to make their own decision based upon his studies. However, they don't plan to go to the institutional investors to pressure them to pressure Starbucks.

If Fineman is so confident in his projections, then he should have no problem presenting them to investors nor have a problem with pressuring these same institutional investors. I would speculate the reason he won't be "pressuring" the institutional investors is because he knows he would be laughed out of the room.


  1. So, is there a relatively cheap way to buy Starbucks stock? It's running less than $50. I'd frame a stock certificate and put it on the wall as a protest against Fineman. I just don't want to pay a lot in fees just to get one or two shares of stock.

    Also, how do we ask CNBC for rebuttal time?

  2. @Sean: Unfortunately, there isn't a cheap way to buy Starbucks stock. They do have a direct purchase plan but it requires a $500 minimum. Info on that is below. Even if you go to a discount broker, they probably will have a minimum to open an account such as $2500.

    From the Starbucks investor FAQ answering whether you can purchase their stock without a stockbroker.

    Yes. Through the BuyDirect Plan, which is sponsored and administered by BNY Mellon Shareowner Services, current stockholders and new investors have the ability to purchase and sell shares of Starbucks common stock. BNY Mellon provides the shares through market purchases. Participants also have the option to automatically reinvest Starbucks quarterly dividend or to receive it in cash. More information about the program and enrollment forms are available by calling BNY Mellon Shareowner Services at 888-835-2866 or visiting BNY Mellon's website at

  3. Can ten of us get together and pool our money to each buy one share?

    Guess I'll be continuing to patronize Starbucks regularly, probably not daily but maybe weekly...