Yesterday, Elliot Fineman of the Brady offshoot National Gun Victims (sic) Action Council was interviewed by Melissa Lee of CNBC. The interview centered on his group’s boycott of Starbucks due to their policy of neutrality on gun issues. Fineman said the boycott would be ongoing. Of course, no mention was made of the Valentine’s Day BUYcott by either Fineman or CNBC.
The story was presented in such a way as to give credence to Fineman’s claims that the boycott would impact Starbucks. When pressed on how it would be determined that his group’s boycott was hurting Starbucks’ bottomline, Fineman said that they were using self-reported data from their supporters on how much they were not spending at Starbucks.
Excuse me but self-reported data from their “followers” is not exactly reliable data from which to make projections. Fineman then says that their Monte Carlo simulations show that 90% of the time their boycott will have “a significant impact on the Starbucks’ stock.” Having used Monte Carlo simulation with retirement planning for years, I understand the results you get are very dependent upon both the constraints and the input data. In other words, if you put garbage in, you will get garbage out and that is exactly what they are getting.
It is very hard to prove a negative unlike a positive. The results from the BUYcott can be shown by an increase in sales for February 14th. However, a decline in sales over time would be hard to attribute to just the boycott by Fineman’s group. There are many other factors like the state of the economy and competitors (like McDonalds) which come into play which are much more significant.
Fineman goes on to say that institutional investors who own 357 million shares of Starbucks’ stock should be able to make their own decision based upon his studies. However, they don’t plan to go to the institutional investors to pressure them to pressure Starbucks.
If Fineman is so confident in his projections, then he should have no problem presenting them to investors nor have a problem with pressuring these same institutional investors. I would speculate the reason he won’t be “pressuring” the institutional investors is because he knows he would be laughed out of the room.