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Non-Tech : Starbucks, boom or bust??

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To: wmf who wrote (4)11/21/1996 11:22:00 PM
From: Robert Lawkins   of 11
 
Oh, I get it now...that was sarcasm...no, we don't do sarcasm on this thread. Actually, I have always wanted to say that, Steve Martin said that or something close to that in "Roxanne".

But now you let the cat out of the bag! Now every SBUX store manager is going to market to all of those 5 billion people. I can see it now...babies standing on line at SBUX with their bottles in one hand and a dollar tucked into their diapers crying, "A frappachino and an arrowroot cookie please." And every SBUX manager saying, "Yeah, way cool heh heh, it was, like, my idea man."

Seriously, I am convinced that they could increase their margins by a full 1% if they didn't serve their burned coffee in two cups! What is with that anyway?

The only way they can make their stock trade at a reasonable level (earnings growth = P/E) is if they open new stores. The only way they can open new stores is to issue new stock. When the issue new stock it dilutes the sales and earnings increases from new stores and they have to open new stores to justify the P/E on the stock. Some day, some analyst will have the balls to write about this.
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