Howard Schultz
speaker
633 appearances
1 recordings
1 series
first heard Jun 2024
last heard Jun 2024
Howard Schultz’s voice in public audio — every appearance, attributed to the second.
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Appearances
And ultimately, it ended up being a very good strategy. Well, it seemed like, I think the numbers are, it was a little bit after IPO in 94, $23 million. They had 23 locations, and they were doing $16 million a year in revenue. So if you just look at the purchase... I think it was one-time sales. Maybe a little over one-time sales.
And the original Starbucks, ironically enough, was exactly a one-time sales, right? That's what you bought it from the founders for. Yeah.
If they had the lock on all the best real estate and they had burned all the capital figuring out what stores we should be in, what stores we shouldn't be in, and then you just get to move into that market for one-time sales, 1.5, whatever it is, with all that already figured out, that's pretty amazing. It probably seemed high at the time, though. I'm sure it did.
Well, isn't that the thing about valuations? It always seemed like in the good old days, everything was undervalued. Yeah. Okay, let's talk about the IPO. So it seems like you knew the moment that you bought Starbucks from the founders, this is going to be a public company.
I thought so. I think there was so much about being a public company that meant something to me personally, that it validated the company, it validated me. My own shame, insecurity as a kid. So that was a driving force all along. Certainly the year before with Beanstalk is an indication of what I was planning if Beanstalk was turned down. I would have waited. That had to be done.
I think we only had a couple of quarters of profitability. And I think we had about 130 stores. And what was the revenue at the time? I don't remember exactly. I know what the market cap was the day we went public.
I think you ended up doing $93 million that year. But the year before, it was $50 million or something like that. Companies went public when they were smaller back then. But you were a small cap IPO.
Yeah, we were. And we got turned down by Goldman Sachs. You know that? I did not know that. I couldn't believe it. I mean, I just, I wanted Goldman Sachs as the, you know, they were the
The patina on the prospectus to have Goldman Sachs. It would be a very Starbucks thing for Goldman Sachs to be the lead left.
Well, Blankfein, I had a good friend who was a senior partner there who's since passed away. I thought I had it locked. I mean, it was just so many things about it, New York, everything. And they said, no, you're too small.
Well, the thing that Dan Levitan told us years ago when we did an episode on the Starbucks IPO was that you were really only considering smaller banks because it was going to be a smaller IPO.
Well, I was considering it because Goldman Sachs turned me down.
I had no choice.
I had no choice. And Brotman at the time was not a big fan of Wertheim Schroeder, which was Dan Levitan's thing. And so Alex Frown became the lead. But I also had my own ego attached to this. I had so much fun on the roadshow.
I was just in my element. I was looking up. I was trying to figure out your public comps at the time. I think there were zero publicly traded coffee companies, not bean companies, not retailers, not coffee house chains. I mean, truly unheard of. So when you're going on this roadshow, I think people, of course, are mystified. There's literally no public companies like yours.
Yeah, I think we had to take them through everything. We had the product there. We served coffee. I gave them the whole show. We had a short video that was probably in black and white. The comp always was a restaurant, and I was always fighting, we're not a restaurant. We're a hybrid retailer. I never referred to us as a cafe. It was always a store. We are a store. We are merchants.
Fascinating. I mean, I go there and eat many, many meals sitting in your store. Yeah, well. But as we've been talking about, I mean, the economics, you were a store. We were a store. We were a retail store. So Howard, I'm going to take us through the IPO. You're the first publicly traded coffee company. You end up doing $93 million in revenue that year. Do you remember the exact price? Yes.
We went out at $17 and the price was $21. The market cap, I think, was $250 million.
Can you imagine today a $250 million market cap company going public? And people considering that a success. I mean, this is a great... At the time. For your employees, how crazy is that? What, 12, 18 months before? Yeah. I guess 12 months before. Yeah. Six bucks a share. You tripled their money. Yeah. Fantastic. And that was when you started calling them partners, right? When they became... 91.
As soon as Beanstalk was instituted, everyone was a partner.
Showing 241–260 of 633 · page 13 of 32
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