Howard Schultz, CEO of Starbucks, has a lesson for investors in Salesforce.com and Netflix:
After decades of breakneck expansion under Mr. Schultz, tight-fisted consumers abandoned it. The company’s sales and share price sank so low (between December 2006 and December 2008, Starbucks’ stock price dropped 73%) that insiders worried Starbucks might become a takeover target…
“Everything Starbucks did in the past, more or less, had worked,” Mr. Schultz said in an interview in January at the company’s headquarters, with a view of Puget Sound south of downtown Seattle. “Every store we opened was successful, every city, every country.”
He continued: “Growth had a life of its own — and that’s O.K., when you’re hitting the cover off the ball every time, but at some point, nothing lasts forever.”
http://www.nytimes.com/2011/03/13/business/13coffee.html
Starbucks stock price has quadruped since December 2008, but it took a long time and a lot of patience for SBUX investors to break even when compared with the closing price of December 2006, and it is still below its all-time high of $40.01 reached in N0vember 2006.
