Some DUmmies who actually understand some corporate econ

[FDK]

Where have these DUmmies been hiding? The ones who actually understand some basic econ. :eek:

marmar (1000+ posts) Wed Jul-02-08 09:20 AM
Original message
Profiting off the misery of others....Starbucks shares expected to rise on plan to cut staff
Advertisements [?]Isn't our system wonderful?



from Bloomberg:



Starbucks May Rise on Plans to Cut Staff, Stores (Update1)

By Joseph Galante and Duane D. Stanford

July 2 (Bloomberg) -- Starbucks Corp. rose in early U.S. trading after the coffee retailer, which has doubled in size since 2004, said it will cut 7 percent of its workforce and close 600 stores.

Howard Schultz, the 54-year-old chairman who fired his chief executive officer in January and took over the post himself, is opening coffee shops at a slower pace and shutting unprofitable stores as he tries to recapture the charm he says Starbucks lost amid a rapid expansion that often put two or more locations within eyeshot of each other.

Investors are likely to respond positively to the cutbacks because they signal Starbucks is coming to grips with its ``overgrowth,'' said Matthew DiFrisco, an analyst at Oppenheimer & Co. in New York.

``They're basically the victim of their own success,'' DiFrisco, who recommends buying Starbucks stock, said yesterday. ``They've admitted that'' by closing 600 stores, he said.

Starbucks, whose shares have plummeted more than 50 percent in the past two years, rose 4.7 percent to $16.35 at 8:51 a.m. before the start of Nasdaq Stock Market composite trading.

The chain said yesterday it would eliminate as many as 12,000 jobs as part of the closings. The cuts include full- and part-time employees and will happen over the next nine months, the Seattle-based company said in a regulatory filing. .....(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601213&sid=axY...

Squatch (1000+ posts) Wed Jul-02-08 09:25 AM
Response to Original message
2. All that indicates is that investors view this restructuring as a favorable direction
for the company to take. It has long been well known that Starbucks' massive expansion was unsustainable, leading to its recent dismal stock performance.

no_hypocrisy (1000+ posts) Wed Jul-02-08 09:30 AM
Response to Original message
4. Any time a corporation does something that has the potential of raising its profits and
revenues, the value of the stock rises. Unfortunately the rule is the corporation's primary fiduciary duty is to its shareholders, not to the employees, not to the environment, not to the consumer. And that makes for some really twisted decisions in the big picture.

QuestionAll (1000+ posts) Wed Jul-02-08 09:54 AM
Response to Original message
7. that's how it works...it's nothing new.
they've had a pretty decent run- but over-expanded too aggressively. it's better that they lose some jobs now, than ALL the jobs a little later.

I am truly shocked to see this much common sense posted in an economic thread at the DUmp.


http://www.democraticunderground.com...ss=389x3553099

[Doc Savage]

Yeah, but when the chior starts chanting for higher corporate taxes, anyone suggesting that those costs will be passed to the consumer are shot down faster than the Iraqi AF was in the 90's.

I wish some member of DU would explain to me how a corporate tax is not part of the COGS on a balance sheet.

[FDK]

Yeah, but when the chior starts chanting for higher corporate taxes, anyone suggesting that those costs will be passed to the consumer are shot down faster than the Iraqi AF was in the 90's.

I wish some member of DU would explain to me how a corporate tax is not part of the COGS on a balance sheet.

To start with COGS shows up on the Income Statement, not the Balance Sheet. :p

Next, COGS does not include corporate taxes.

[ralph wiggum]

To start with COGS shows up on the Income Statement, not the Balance Sheet. :p

Next, COGS does not include corporate taxes.

Don't confuse the DUmmies by explaining what items belong where on the financial statements. Hell, if most of them had a "personal balance sheet", they'd probably include their bong and supply of cheetos as assets.

[Doc Savage]

OK, so it has been a while since I took managerial accounting. My point is that the dummies call for increases in coporate taxes all the time. Some how does the coporation pay these incresed taxes? Either the cost comes out of the profit or prices are raised to cover the costs. Either the stock holders pay for it or the consumer does. That is what I was trying (badly) to say.