Of course their books are cooked - at least they are if you use my definition of "cook". Book-cooking is the the great Wall Street pastime - and SBUX mgmt is certainly a player.
Earnings are fluffed, prospects are talked-up, and in the case of SBUX, stores are overbuilt - - and as all of this is happening, new stock is underwritten, and enormous fees are collected, by the banks that you and your children just bailed out.
Management then gives themselves options and cashes them in - - and again, in the case of SBUX, management uses stockholder money to support the price at which they cash their options through the corrupt (but legal) method of stock buybacks on the open market. The investment bankers collect big fees and puff-up their favored accounts with new issues. And then poof! The distribution phase ends and all the puffery stops.
Stocks then are allowed to tank. Folks like Mr. Schultz disappear from CNBC. Press releases are grim. Charges are taken, stuff like good will is written down. It is in this phase where the banks that you bailed out accumulate stocks.
And then the cycle repeats.
There are, of course honest managements. Warren Buffet is the only one that comes immediately to mind.
spaticuss said > "There are, of course honest managements. Warren Buffet is the only one that comes immediately to mind."
I've not heard of Buffs doing anything illegal, but he does invest heavily in insurance and then cry "FEMA!" when it's time to make settlements.
Hey Buffs, if you're reading the messages on the SBUX board tonight and happen to stumble upon this gem, then why not take my suggestion and lean on the insurance execs to pump a little bit more into cash reserves and conservative investments and a little less into their own wallets so they can take care of their business the next time a disaster of Hurricane Katrina hits one of those Gulf cities which is sitting at sea level elevation. You might even melt down a few thousands of your "A" shares so us taxpayers can catch a break.
The other thing Buffs did was sit on the Coke board with his massive KO holdings and do his part to keep the KO dividend going as its stock floundered. KO pays a dividend which feeds directly into BRK; seems like a conflict of interest to me....
Yes, of course, mscottpaper. You take a few fish head, some tomatoes and a half a dozen secret spices, cook them on low for a few hours and viola! Starbucks, quite famous, bouillabaisse books. Yummy - is a word!