“While our growth will not be linear this year, we are confident that our approach will support a profitable business today and over the long term, and create value for all stakeholders, our partners, our customers and our shareholders,” Chief Financial Officer Rachel Ruggeri said in a presentation to investors.
But that plan was scuppered when Howard Schultz assumed the role of interim CEO on Monday, taking the reins of the company for a third time.
“This decision will allow us to invest more in our people and our businesses – the only way to create long-term value for all stakeholders,” he wrote.
What has changed? Stock buybacks are under political scrutiny after hitting an all-time high of $882 billion among S&P 500 companies last year. Handing investors cash usually boosts stock prices by reducing the numbers available, but critics say the money would be better spent on workers and other investments that can boost the broader economy.
Last week, US President Joe Biden proposed new rules to curb the practice.
However, a Starbucks spokesman indicated that the decision was not about the political climate. The decision to suspend the buyback program was “Starbucks’ agenda, and only Starbucks’ agenda.”
So the other big factor is the workers. Since December, several Starbucks locations have been unionized against the company’s wishes, reports my CNN Business colleague Danielle Wiener-Bronner. Others are considering the option.
Schultz has tried to dissuade employees from unionizing and touted the importance of a “direct and mutual relationship” with workers.
But in the wake of the pandemic, employees — fed up with long hours, health risks and rising costs due to rising inflation — have more power than they once did. Job openings in the United States stood at 11.3 million in February, near an all-time high as companies struggled to hire and retain workers. This has given additional impetus to efforts to form unions. Last Friday, Amazon (AMZN) warehouse workers at a facility in New York City voted to create the first US union in the tech giant’s 27-year history.
Breakdown: In this climate, management might find it harder to defend generous stock buybacks, and boards like Starbucks might decide the money should go to employees instead. After all, shareholders have had it pretty good during the pandemic.
Starbucks shares fell nearly 3% in premarket trading on Monday. While they’re down 22% so far this year, they’re up 33% in 2020 and 2021.
On the radar: Senator Bernie Sanders drew a direct line between buyback excesses and the need for unions in a recent statement following the announcement of Schultz’s new role.
“If Starbucks can afford to spend $20 billion on stock repurchases and dividends … it can afford a unionized workforce,” he said.
War Bonds and NFTs: How Ukraine Funds its Defense
The epicenter of recent efforts to raise money for Ukraine was a sparse office above a north London bakery.
Isaac Kamlish, Nathan Cohen and Isaac Bentata – aged 23 to 25 – gathered around their laptops last week and helped launch the first-ever sale of one-of-a-kind digital collectibles by a national government.
Within 24 hours, using the technology developed by the trio, Kyiv sold more than 1,200 non-fungible tokens, or NFTs, and raised about $600,000 to fund its defense against Russia.
The auction, which used blockchain technology to leverage war financing in novel ways, underscores how the Ukrainian government is using both new and traditional tools to generate the money it needs to survive the crisis.
A playbook was old school. Kyiv has recovered about $1 billion from war bonds sold to people and institutions in Ukraine as residents are willing to lend to the government, though there is no guarantee they will get all their money back.
President Volodymyr Zelensky’s administration has also encouraged potential donors around the world to transfer cryptocurrencies directly, an effort that has raised more than $56 million, according to analytics group Chainalysis. And in last week’s NFT sale, collectors from Los Angeles to Barcelona rushed to participate in what they saw as an important moment for Ukraine and crypto.
“The war in Ukraine is devastating and will go down in history,” Ben Jacobs, co-founder of Scenius Capital, a digital asset investment firm, told me. “This use of crypto technology is also historic in its own right.”
Jacobs, who is based in Venice Beach, California, bought two NFTs and spent a total of $1,100, including small fees related to the transactions. About $1,000 in ether — the cryptocurrency typically used for NFT sales — went to the Ukrainian government.
The London Metal Exchange remains in crisis mode
When a trade jumps 250% in a matter of days, investors usually pop champagne bottles. In early March, nickel futures did just that – rising from about $29,000 to $100,000 a tonne on the London Metal Exchange following the invasion of Ukraine. But the champagne remains corked and investors are threatening lawsuits.
On Monday, Britain’s financial regulators said they were reviewing the stock market’s latest actions, citing concerns over transparency.
So what happened? My CNN business colleague Nicole Goodkind has addressed the chaos at the LME and its uncertain future.
For the past century and a half, the LME – known for its ring of red sofas and barking brokers – has successfully fought its way through world wars, meltdowns and defaults. But nickel, the metal used in stainless steel and the lithium-ion battery cells in most electric vehicles, could eventually deal a fatal blow to the world’s largest base metal market.
“The LME is now very likely to die a slow, self-inflicted death from a loss of confidence in them and their products,” tweeted Mark Thompson, executive vice president of Tungsten West, a mining development company.
The dramatic price rise, partly triggered by a Chinese metal magnate, caused the LME to halt trading suddenly. Some trades were even canceled. As a result, many investors have lost faith in the stock market and are looking to relocate their business elsewhere. But the options are limited.
“There is no alternative right now,” said Nikhil Shah, an analyst at the CRU Group. “There’s no other choice out there.”
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The ISM Non-Manufacturing Index, which tracks the US service sector, is released on Tuesday.