Starbucks Betting on $10 Coffee; Trump Ready to Dump on Pharmaceuticals; Trump’s June Stock Dump

Jolted…

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Image courtesy of Simon Howden/FreeDigitalPhotos.net

Starbucks CEO Howard Schultz is stepping down from his post in April with plans to build a Starbucks’ prestige brand where he will serve as its Executive Chairman. The idea is that by going upscale Starbucks will be able to raise its profile with those pesky millennials. Besides that, the company needs to compete with a number of other upscale rivals that keep rearing their gourmet heads all over the place. One thousand “Reserve” brand stores are slated to set up shop with another 30 large Reserve Roastery (expect to find that word added to a dictionary near you) and Tasting Rooms expected to open up all over the globe. In case you were wondering what one orders from this new prestige brand, you might consider purchasing a $10 cup of coffee that you can sip daintily from a glass siphon.  Or perhaps you’re up for paying $50 for an 8 oz. bag of an exotic, small-lot coffee? I’m sure you’ll find something worth depleting your funds.  In any case, Starbucks also announced plans to open another 12,000 stores –  that’s in addition to its already existing 25,000 stores –  in the next five years.  Five thousand stores are slated just for China. The company also plans to annually boost revenue by 10% while adding between 15% – 20% to its shares, and increase its focus on its food offerings since the coffee giant is convinced it can double its growth in that area.

What a pill…

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Image courtesy of amenic181/FreeDigitalPhotos.net

Donald Trump’s latest executive plans involve bringing down drug prices and the pharmaceutical companies that keep increasing them with seemingly reckless abandon. Which is kind of ironic since pharmaceutical stocks saw a huge surge following Trump’s election. And here they thought they had an ally. Hah! A Kaiser Family Foundation survey leading up to the election found that people felt drug prices were the number one healthcare issue for the next President. Well, I guess the President-elect is ready for it then. Sort of. Trump has yet to outline any concrete plans on how he is going to achieve this goal. But during his campaign, Trump did say that he is all in favor of consumers having their meds re-imported. He also wants Medicare for the elderly to renegotiate drug prices directly with pharmaceutical manufacturers. That should be fun to watch, especially because both the industry and many many Republicans are vehemently against that idea. Stay tuned for that drama. Just today, Pfizer Inc. and Flynn Pharmaceutical Ltd. were slapped with some massive record fines in the UK after raising drug prices by…wait for it…2,600%. Now, Pfizer will cough up about $106 million, while Flynn will fork over approximately $6.5 million. I guess they should be happy that they were busted in the U.K. and still have time to clean up their act in the United States before Trump-dom takes effect. In the meantime, Allergan Plc. CEO Brett Saunders is bracing himself for the new president’s impact and said Trump could end up being more “vicious” on pharmaceuticals and their drug pricing than Hillary Clinton might have been. But he also pledged to limit price increases to less than 10% per year. Or perhaps he did that lest Trump unleash his Twitter wrath on Allergan, just like he’s done to several other individual companies including Carrier Corp., Ford and Boeing.

Under-stocked…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Yesterday, President-elect Donald Trump’s team announced, with no explicable reason as to the timing, that he sold off all of his stocks back in June. Don’t hold your breath for proof of that sell-off as none was provided. While being interviewed today on the “Today” show by host Matt Later after being named Time Magazine’s “Person of the Year,” Trump explained that he decided to unload his stock holdings in order to avoid any conflicts of interest. How very gallant of Mr. Trump.  And even though the press was not made aware of it until yesterday, Donald Trump insisted that everybody already knew. We just don’t know who “everybody” is. Mr. Trump went on to say that he sold off his stocks since he knew he would win the election and would be making deals for the United States that could affect various companies in all sorts of different ways. That was indeed very thoughtful of him. He also said he didn’t even own that much stock.  Which is debatable at best since a recent filing from December of 2015 valued his holdings at $40 million. But in all fairness, his stock market holdings pale in comparison to his real estate holdings which apparently make up the bulk of his net worth.  Ethics experts, however, are suggesting those real-estate holdings might also be a conflict-of-interest as well. Just saying. It’s worth noting that since his sell-off, the S&P 500 went up over 10% while the Dow Jones Industrial Average hit some very impressive all-time highs. Since Trump’s victory, many stocks have also hit all-time highs and, of course, he’s taking credit for it.

GoPro Makes a Gnarly Debut, IKEA Makes a Gnarly Wage Hike and GM Might Have a Not So Gnarly Recall

Would you like some meatballs with that…

Image courtesy of fotographic1980/FreeDigitalPhotos.net

Image courtesy of fotographic1980/FreeDigitalPhotos.net

In case you didn’t know, IKEA is a really industrious company and not just because you furnished your entire first apartment with it without ravaging your bank account. Today the Swedish company announced that it is raising its minimum wage by 17% from $9.17 to 10.76. “It’s driven from our vision of wanting to create a better everyday life for our co-worker.” Well amen to that, IKEA President Rob Olson! But the company also think it’s going to help keep turnover to a minimum and recruit more employees. IKEA is going by the MIT wage calculator that takes into account all sorts of factors and how much it would cost to afford life’s basic necessities. Gosh darn those smarties who did the math! The Gap and Old Navy also have plans to raise their minimum wage as well. The federal minimum wage is $7.25. However, the perennial buzz killers argue that raising the minimum wage is bad because it could lead to lay-offs and a decrease in hiring (cue the chirping crickets).

Wall Street is like totally stoked…

Image courtesy of M - Pics/FreeDigitalPhotos.net

Image courtesy of M – Pics/FreeDigitalPhotos.net

GoPro made its extreme Wall Street Debut today and it was not a disappointing ride. Founded in 2002 by Nicholas Woodman, the company pulled in close to a $1 billion in 2013. GoPro is all about documenting life’s awesome adventures with a special camera that would shame the one on your phone. No really, it would. Would you actually whip out your iPhone mid-skydive or mid-surfing? Didn’t think so. The camera and all its gnarly accessories make for some fun digital media, of which GoPro, naturally makes it easy to use on a variety of platforms. Valued at close to $3 billion, the company began its day at $24 a share but rose quickly to $30 a share making for a totally rad Wall Street ride.

Oops! It happened again…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

It would almost seem weird to go a week and not hear about another GM recall. Okay so this next one didn’t happen yet. But it’s coming because of a potential defect with airbags on Chevy Cruzes- a major problem and not just because it’s GM’s number two selling vehicle right after the Chevy Silverado.  So far, 120,000 of them have been sold this year. The defect, incidentally is not entirely the fault of GM who uses airbag supplier Takata – a supplier used by several car companies, in fact. Meanwhile, over at the Today Show, Matt Lauer has been taking heat over some questions he posed to GM CEO Mary Barra. He asked her if she got the position because she is a woman and that GM needed to present a softer image considering all its problems in the past year. Then Matt not-so-politely asked if she could even handle the job with all its challenges as well as being a super awesome mom with all the demands of that role. Would he have dared asked such questions to male CEO’s, many wonder? Back over at GM, Barra said the there would be no more firings over the recalls. Isn’t that a relief? Or isn’t it? Hmmm.