Hey Snackers,
Transitory, we hardly knew ye. The Fed’s likely to hike interest rates by a quarter point today, the first in what’s expected to be several rate hikes this year to blunt rising inflation. Stocks jumped, while oil fell further below $100.
Meanwhile, Ukrainian President Zelensky is set to address Congress (virtually) today, while President Biden plans to fly to Brussels next week to meet with NATO and EU officials as the war continues.
BYOM… Time to dust off that old college mug before your next coffee run. Starbucks plans to phase out its signature paper and plastic cups over the next three years in a renewed effort to get customers to embrace reusables. Starbs goes through 7B disposable cups a year — which account for nearly a quarter of its global waste. Now the coffee giant is experimenting with ways to fix its garbage problem, while catering to eco-friendly investors:
Frictionless frappuccinos… Starbucks has struggled to get people to change their daily rituals. In 2008, it pledged to have a quarter of customers drinking out of reusable cups by 2015 (didn’t happen). Now Starbs figures the best chance of success is a push that has minimal impact on people’s routines. For drive-thru, it could mean baristas pouring premade drinks at the window. Don’t like walking around with a mocha-stained tumbler? Cup-washing stations — like those bartenders use — are coming to some stores.
Starbs is putting skin in the sustainability game… Nearly all corporate sustainability initiatives fail. But Starbucks is investing real capital to try to make reusable cups stick. How much it costs is TBD. Starbs shares rose on its cup-cutting announcement, and ahead of today’s shareholder meeting. But they’re still down 30% in the past year as the latte icon contends with supply snags, rising costs, and labor issues.
Grab the popcorn… There’s a plot twist in AMC’s stock saga. The struggling theater chain has bought a 22% stake in a gold mine for $28M. FYI, the Nevada mine, Hycroft, went public through a SPAC in 2020 after financial trouble and bankruptcy. AMC stock rose 6%, and the Nevada mine, Hycroft, jumped 19% yesterday on news of the odd-coupling:
Roller coasters… Last year, AMC shares popped 12X and GameStop shares spiked 7X thanks partly to an influx of retail investors. Both companies used their juiced-up market caps to raise cash.
AMC’s already converted some buzz into cash… Now it’s using that cash in even more experimental ways — e.g., acting kind of like a holding company. But it’s a long way from AMC’s core biz: movies, getting people to buy popcorn, and see them again. As for Hycroft, the mine’s looking to raise $500M through an ATM offering. TBD if that’ll work.
Authors of this Snacks own: shares of Starbucks, and Tesla
ID: 2082247