Interesting Starbucks Deal With Nestle (sbux)

Discussion in 'General Trading Discussion' started by gowiththeflow, May 7, 2018.

  1. gowiththeflow

    gowiththeflow Senior Investor

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  2. JR Ewing

    JR Ewing Super Moderator Staff Member

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    Looks like the shares of both companies spiked a bit.
     
  3. Chartman

    Chartman Senior Investor

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    Without knowing the wholesale product price Nestle will pay in the future and how any marketing costs might be shared, this deal looks to be a win win for Starbucks in the short to medium term at least. However, like Apple, it is a little disappointing that the company seems intent on using a near $20b warchest to buy back shares and increase the dividend in the coming years. No plans to introduce a new business leg or branch out into other associated areas of business?

    Being able to buy Starbucks products in shops will surely dent coffee shop sales in due course - or at best place pressure on margins?
     
  4. gowiththeflow

    gowiththeflow Senior Investor

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    Maybe Starbucks believes that the coffee shop format is maturing?
     
  5. Buyonthedips

    Buyonthedips Senior Investor

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    I wont be buying into these on the dips - building up a massive cash pile with no idea of how to invest into the business. Is Starbucks selling the family silver because it sees the coffee house business maturing?
     
  6. Chartman

    Chartman Senior Investor

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    I agree - until we get the terms, it looks to me as though Starbucks is effetively selling the family silver (albeit for a good price!)
     
  7. longtermbull

    longtermbull Administrator Staff Member

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    I remember the "deal changing" Amazon/Nike deal a few months ago (although different in that no payment was received) which has so far failed to deliver the promsied benefits - well not yet :)
     
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