Hey Starbucks, is Support for Same-Sex Marriage Worth a $10 Billion Loss in Stock Value?

Is support for same-sex marriage worth a $10 billion loss in stock value?  That’s a good question for Starbucks as the National Organization for Marriage announced its Dump Starbucks campaign, launched in March, has had an impact on Starbucks stock.  Similar chains such as Panera and the Olive Garden (Darden Restaurants) are up for the year. Forbes began to notice a partisan divide over Starbucks in mid-July, the full timeline is below.  It’s also worth noting that 32 out of 32 states have voted to preserve marriage as the union of a man and a woman – including “blue” states such as Maine, Michigan, Oregon, Hawaii and California (twice).  The most recent state to vote was North Carolina (a state won by Barack Obama in 2008) in early May and marriage was upheld by 61-39%.  Perhaps it wasn’t so wise for Starbucks to accuse so many of its customers of being ignorant and bigoted.

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• March, 21, 2012 – Starbucks Chairman and CEO Howard Schultz tells shareholder Thomas Strobhar – in response to Strobhar’s question at a shareholders meeting of whether or not the corporate decision to endorse a controversial social matter such as same-sex marriage was prudent – that Starbucks was going to measure its support for same-sex marriage by whether it was in any way dilutive to shareholder value.  He said to date it had not damaged their business and that the decision was in the best interest of the entire company.
• March 21, 2012 – The National Organization for Marriage announces its “Dump Starbucks Campaign.”
• April 10, 2012 – NOM announces the Dump Starbucks Campaign is going international.
• April 13, 2012 – Starbucks reaches a high of $61.67 per share.
• July 26, 2012 –  Starbucks stock closes at $52.405 per share.  That evening, after the market closed, Starbucks releases its quarterly financial information which investors find disappointing.
• July 27, 2012 –  Starbucks stock opens at $46.61 per share, a drop of $5.795 per share.  Multiplied by 760 million outstanding shares of Starbucks and that is a loss of $4,404,200,000, or $4.4 billion.
• August 1, 2012 – Starbucks customer relations agent emails a concerned customer regarding the company’s support for same-sex marriage, noting they have “not provided any financial support of (sic) this legislation,”  referring to same-sex legislation in Washington State where Starbucks is based. (emphasis mine)
• August 17, 2012 – Starbucks stock closes at $48.21 per share, a loss of $13.46 per share since the April 13 high.  Multiplied by 760 million shares and that is a loss of $10,229,600,000, or over $10 billion.

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Is a loss of $10 billion dilutive to shareholder value?

(These numbers all come from Google/NASDAQ at http://www.google.com/finance?client=ob&q=NASDAQ:SBUX)

The National Organization for Marriage Announces Success of Starbucks Protest

“Starbucks supported same-sex marriage, saw their support from Republicans dwindle, missed sales projections, and watched the company lose $4.4 billion overnight and over $10 billion from their 2012 high.”

– Brian Brown, NOM president –

Washington, D.C. – Today, the National Organization for Marriage (NOM) announced that their protest of Starbucks is achieving results.  “Starbucks supported same-sex marriage, saw their support from Republicans dwindle, missed sales projections, and watched the company lose $4.4 billion overnight and over $10 billion from their 2012 high,” said Brian Brown, NOM’s president. “While executives of publicly traded companies have had a wonderful time claiming that not supporting same-sex marriage hurts their employee recruitment and retention efforts, we now have a case study in how alienating millions of customers can directly affect the bottom line of a public company and damage shareholder value.”

On Wednesday, March, 21, 2012, Starbucks Chairman and CEO told shareholder Thomas Strobhar, in response to Strobhar’s question of whether or not the corporate decision to endorse a controversial social matter was prudent, that Starbucks was going to measure this situation by whether it was in any way dilutive to shareholder value, and that to date it had not damaged their business and that the decision was in the best interest of the entire company. Over $10 billion dollars in shareholder value later it is no wonder that Starbucks turned down same-sex marriage advocates who initially sponsored a Starbucks Appreciation Day and responds to customer inquiries about their corporate position on same-sex marriage with a statement that Starbucks has never donated any actual money to same-sex marriage advocates in Washington State where they endorsed same-sex marriage.

“True success in this protest effort will not be achieved until Starbucks steps back from the debate over the meaning of marriage. The fact is that Starbucks has alienated millions of customers worldwide, has seen their sales fall behind even their own conservative estimates, and has watched their stock value drop as investors and shareholders have gotten cold feet. This should give pause to any publicly traded company that is looking to advocate against the traditional definition of marriage,” continued Brown. “Stock prices and sales are subject to a myriad of factors, but business leaders and voters would do well to consider the experience of Starbucks, and the millions of people who voted in support of traditional marriage at Chick-Fil-A on August 1st with their pocketbooks, when they are being told by gay marriage proponents that support of same-sex marriage will be good for their bottom line and the business community in general.”