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Howard Schultz Buys Starbucks Stock Worth $14M
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Howard Schultz Buys Starbucks Stock Worth $14M

Howard Schultz continues to ‘pour his heart into Starbucks’. The Starbucks (SBUX) Interim CEO and Director just bought 210,000 Starbucks shares worth about $14.98 million.

Schultz acquired the shares on May 12 and May 16. Notably, the stock purchase comes at a very critical time for the company and after eight long years for Schultz. The last time he bought Starbucks shares was in May 2014.

The total value of Schultz’s Starbucks holdings now stands at about $1.65 billion.

Importance of Schultz’s Buy

Starbucks shares are down 38% so far in 2022 and are languishing at 52-week low levels. Schultz, the founder of the company, has taken up the mantle of CEO for the third time after CEO Kevin Johnson announced his retirement as CEO in March.

Schultz will be interim CEO of Starbucks until the company finds a new person to take up the post. The company is facing challenges from unionization efforts, COVID-19 in China, and soaring inflation levels.

Despite these challenges, the company recently delivered record second-quarter sales of $7.64 billion, clocking a growth rate of 14.5%. But rising costs are impacting investor sentiment. The company is raising wages, introducing other benefits to employees, and has committed $1 billion to invest in employees. Earlier in May, federal officials accused the company of unfair labor practices at its outlets in Buffalo.

Schultz, who is opposed to unionization, is taking steps on this front and commented in the earnings call earlier in May, “In the month I have been back, I have traveled the country and met with thousands of Starbucks retail store partners and visited all five of our roasting plants, and I have learned first-hand about the unique challenges confronting the company today…From my perspective, I understand what’s needed, and I am back to lead this transformation and committed to seeing it through.”

Investors Are Sticking With Starbucks

TipRanks data indicates investor sentiment remains very positive about Starbucks, with the number of portfolios holding Starbucks up by 3.4% in the last 30 days alone.

Closing Note

Amid a variety of challenges, Starbucks is focusing on growth, drive-through outlets, and margins. The return of Schultz has certainly helped investor sentiment. How the company wades through these trying times remains to be seen.

Read full Disclaimer & Disclosure

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