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2018-05-17 07:00 by Karl Denninger
in Company Specific , 200 references
[Comments enabled]  

Howard Schultz already demonstrated he was outrageously stupid during the last Presidential Campaign Season by inserting a public company into the debate about who should win the Presidential election -- thereby guaranteeing that he would******off half the people of the country.

But what's happened now may actually destroy Starbucks entirely.

Recently, as I'm sure you're aware, there have been a couple of high-profile screamfest incidents relating to people being turned away from the bathrooms because they're non-customers -- or believed to be non-customers.  Both of the recent high-profile incidents involved people who are black.

Businesses selling food and beverages for on premise consumption typically are required by local codes and ordnance to have bathrooms for their customers -- for obvious reasons.  Unfortunately this has meant that some percentage of the population will take advantage of that "safe, secure and private" little spot to do illegal things, whether it be shoot up drugs, engage in some quick act of gay prostitution or similar.

Yeah, I know, it's disgusting.  Tell your local heroin addict or methhead and see if he or she cares.

As a result in many places restrooms are placarded Customers Only, and in some places they actually mean it.  It's not uncommon at all for someone to duck into a McDonalds' while on the road and take a leak, and McDonalds' typically doesn't care because most of the time the people who do that are traveling and might buy something.  The might is enough, coupled with their location right off a busy road where such problems as a crank-head looking for a place to take a hit, or a heroin addict looking for a place to shoot up, are not factors.

But what Shultz has now done in response to these two recent incidents is to make it corporate policy that all Starbucks now have open bathrooms, rather than leave it to manager discretion.

This is a horrid policy.  It'll be fine in some places, but in those places there's no constraint now.  The Starbucks by the side of the freeway and such, no problem.  But those locations never cared to begin with, and never had a customer only policy because, like the McDonalds' 500' off the freeway exit they know damn well that a very high percentage of the time those who come in to pee will buy something, and that's good enough.

Now try the same thing in a Starbucks that happens to be not on a major highway, but in a place where there is a drug problem, or, maybe even worse, a bit of gay prostitution going on.  Or, for that matter, in our sex-doesn't-matter world where one can't constrain someone to a bathroom conforming with their bodily parts, regular old-fashioned heterosexual prostitution!

This will be a disaster.  Those stores in areas like this will be forced to close, at minimum.  At worst they'll get tagged for facilitating hookers and dope deals.

Yeah, it's true that managers don't get it right 100% of the time.  But the fact is that they do get it right 99.9% of the time, and while the exceptions suck and made for some nasty black eyes on a corporation's reputation reality is that this sort of abuse is real, it's a problem, and this sort of "fling the doors open" response is idiotic -- and might be corporate suicide.

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2018-04-30 09:09 by Karl Denninger
in Company Specific , 117 references
[Comments enabled]  

So here we go again.

Those of you who have been around for a while know that I played quite a large bet with Sprint back before Softbank got involved with them -- and the trade worked out quite well.

I dumped the position after that deal because Softbank is opaque enough in its financials and operations that I just could not get my arms around what I would continue to be owning if I didn't.  So.... out the door with the profits I went.

It turned out to be a good decision.

Now we're back with T-Mobile and Sprint (with T-Mobile basically swallowing Sprint) but at no premium.  There's no big surprise there; Sprint continues to basically "buy" market share yet isn't generating much in the way of free cash flow.  Remember that both of these firms are carrying a fair bit of debt; Deutsche Telecom, T-Mobile's parent, has acknowledged that this deal will place the combined corporate leverage beyond their considered "safe" window (which, incidentally, I think is too damn high to begin with.)

The potential "gotcha" in this deal would be Sprint's continued use of CDMA, which is not gone from their network by any means.  It's headed out with 5G of course, but when -- and at what cost, including cost to consumers who will have to swap handsets (at which point it's "free" for them to leave unless you bribe them) and  in capital equipment that is still on the books with an alleged value -- if the deal closes every bit of that gear instantly gets zeroed!

That assumes the deal passes anti-trust review, which is not a slam-dunk by any means.  The "selling" claim to the regulators will be that Sprint will literally die if they don't get this deal approved.  Jobs too tend to suffer badly when you have large mergers like this take place.  Then there's the MVNO angle, which will also suffer material collapse; there are several that offer service on both networks and those will obviously also be redundant.

I give this deal a 50% chance of closing and if it doesn't I suspect there's a decent chance Sprint detonates, while at the same time the disruption to T-Mobile may be rather material as well.

May you live in interesting times.

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2017-07-20 15:38 by Karl Denninger
in Company Specific , 257 references
[Comments enabled]  

How do you stop Zuckerpig's privacy invasions?

Boycott anyone who advertises on those sites -- do not buy and do not do business with in any other way.  How do you know they're advertising?  You see "Sponsored" or any sort of video ad from a given entity.

This post is exempt and will never go away.  I will add to it as I see new companies, and if you do and can confirm it to me I'll add them.  Here's my pledge: If I see an ad from your firm on any of Zuckerpig's properties or sufficient confirmation (e.g. seeing such an ad on someone else's device in the app) I will never buy anything from you.

You choose -- you advertise and pay that company to do so, you lose my business.  To get it back you must permanently pledge to never again advertise on any Facebook-owned property, in public, via a formal press release or other similarly-verifiable and public method.

Oh and you get one second chance, never more.

Advertising is legal.  So is refusing to do business with you because you are the primary and in fact nearly the sole source of funds for a company that does things I consider detestable.

So here is the start of it folks, and yes, it will grow.... check back often!

  • Best Buy (Oh well; I've bought plenty there)
  • REI (this one hurts; I like them.... but no more!)
  • Big Green Egg (Sorry *******s, I was interested but NOT NOW!)
  • Southwest Airlines (all airlines SUCK, but now these ****ers are on my blackball list)
  • Consumer Reports
  • Inked Magazine
  • Runner's World (oh well!)
  • 30A clothing company (oops -- that one's local)
  • The Heritage Foundation (oops again!)
  • Huffington Post (no loss there)
  • A&E TV
  • We Are The Mighty (Military-oriented news org)
  • Orbitz
  • LinkedIN (be a paying customer and you're blackballed - as employer or employee!)
  • iHeartDogs.Com
  • Pensacola Runners Association (ouch; they sponsor races I'd run in...)
  • National Geographic (oh well)
  • CNet (Bleh)
  • 22 Words (Clickbait garbage, but heh)
  • Theclymb.com
  • Active.com (oops again; and I have bought quite a lot from gearup...)
  • 12 Tomatoes
  • The Penny Hoarder (yeah, another clickbait garbage site, but..)
  • SoWal (oops -- bye-bye Walton County beach businesses..)
  • Innermost House (San Fran Non-profit... good for some west coasters)
  • NTD Television
  • The New York Times (shock - NOT!)
  • Conservative Tribune (news)
  • Netgear (Router/ipCam/etc manufacturer)
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