Stabucks: Give Shareholders A Free Gift Card

03/28/2008 02:45 am ET | Updated May 25, 2011
  • Douglas A. McIntyre 24/7 Wall Street

Any investor who held Starbucks (SBUX) shares last November and still has them today has lost about half of his or her money. SBUX hit $40.01 on November 16, 2006. After a downgrade from RBC today, the stock moved to $20.54.

There is a way to compensate those shareholders for their faith in the company. Give each one of them a free Starbucks charge card worth $20, prepaid by the company. At least the shareholders can go enjoy a beverage. It won't really cost SBUX $20 because they mark up their drinks and other inventory so much. It might get the people to come back as paid customers, if they enjoy the experience.

The company has a float of 712 million shares, so there would be a one-time charge. Founder Howard Schultz could pass on taking his free cards and save the company some loot.

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