The stock price of Starbucks Corporation tanks today after the company announced that its COO Troy Alstead is taking an extended unpaid leave. Alstead has been serving the company for 23 years.
The shares of Starbuck Corporation were down more than 3% to $79.81 per share at the time of this writing, around 1:15 P.M. in New York.
A beloved Starbucks partner
In a statement, Howard Schultz, CEO of Starbucks Corporation said he can recall so many memorable memories and accomplishments, which Mr. Alstead can take pride in a job well done during the 23 years they spent together side-by-side as colleagues in the company.
Voss Capital is long Nintendo, Avid and Extreme Networks despite “Software bubble”
Voss Capital's Voss Value Fund was up 19.91% for the third quarter, while the firm's Voss Value Offshore Fund was up 19.88%. Both funds are now in the green for this year after erasing the damage that was done in March. Year to date, the Voss Value Fund is up 2.41%, while the Voss Value Read More
“Troy is a beloved Starbucks partner and has played an invaluable role in our growth as an enterprise and in the development of our culture as a performance driven company… Troy’s humanity and humility will be missed and we wish him the best,” said Schultz.
According to Starbucks Corporation, Mr. Alstead will begin his extended unpaid leave on March 1. The company will provide details regarding the issue during its earnings call on January 22.
In a memo to Starbucks employees, the company said Mr. Alstead went for a “coffee break,” a sabbatical available for those who have been working for the company for more than a decade.
Speculations regarding Mr. Alstead’s decision
Some people speculated that Mr. Alstead is leaving the company either due to issues concerning his health or Starbucks Corporation’s fourth quarter performance is weak.
Howard Penney, an analyst at Hedgeye Risk Management opined, “My expectation is that the company will miss the (fiscal first) quarter, which will be the second-quarter in a row, and Troy is taking the heat for that.”
In a memo to Starbucks employees, Mr. Schultz rejected the speculation and clarified, “I want to be clear that Troy’s decision to take his coffee break/sabbatical and suggestions that his departure is somehow linked to his health or our financial performance last quarter are false, off-base and irresponsible,” clarified Mr. Schultz in a memo to Starbucks employees.
RBC Capital Markets analyst David Palmer commented that if Mr. Altead’s sabbatical will become permanent, it would be a significant loss for Starbucks Corporation.