Over 3,500 employees from more than 150 Starbucks (NASDAQ: SBUX) stores are set to go on a nationwide strike next week in the US after the coffeehouse chain allegedly banned Pride month decorations at its cafes, Starbucks Workers United (SBWU) union announced on June 23.
“We are taking collective action in response to the company’s unlawful decision to unilaterally alter or terminate store Pride decoration policies without negotiating with our union.”
– Starbucks Workers United said in a document published on Twitter.
The union representing said Starbucks baristas said the company’s Seattle Roastery will be leading the strike.
The company denied the claims on Friday, describing them as “false information,” and adding there had been “no change to any policy on this matter.”
The SBWU said Starbucks took down Pride-themed decorations and flags at its stores earlier this month, leading to social media criticism.
The company’s shares opened sharply lower at the market open on June 23.
Starbucks stock price analysis
At press time, shares of Starbucks were changing hands at $97.72, down 3.10% on the day.
Over the past month, the stock’s price remained relatively flat, declining slightly by 2.6%.
Starbucks shares soared to $114.46 at the start of May, marking its highest price level this year. However, since then, SBUX returned to a downward trajectory, losing roughly 15% over that period.
How could the strike impact the SBUX stock price?
In recent months, several prominent US-based companies, including Bud Light owner (NYSE: BUD), Target (NYSE: TGT), Walt Disney (NYSE: DIS), and North Face (NYSE: VFC) have all faced significant backlash over their in-store Pride month celebrations and campaigns involving LGBTQ influencers.
The backlash has led to extensive boycotts, placing these companies in unfavorable positions. As a result, investors jumped ship, triggering steep share price declines in the aforementioned firms.
For instance, in the period between May 1 and June 19, Bud Light, Target, and North Face collectively lost more than $25 billion in market cap.
Having said that, it shouldn’t be a surprise if we see a similar scenario with Starbucks stock once thousands of employees go on strike next week.
Investors usually don’t react well to company boycotts because they perceive them as threats to the company’s reputation, brand value, and future profitability, leading to decreased investor confidence and a subsequent decline in stock prices.
Source: https://finbold.com/over-150-starbucks-stores-to-strike-over-pride-displays-whats-next-for-sbux-stock/