Starbucks: Big blow to Starbucks amid Israel-Hamas conflict, loss of 11 billion dollars due to boycott

Global political tensions are taking a toll on Seattle-based Starbucks Corporation, resulting in the company losing nearly $11 billion in its market value. Due to this the total value of the company has declined by 9.4 percent.

Starbucks shares have fallen 8.96 percent in the 19 days since the Red Cup Day promotion on November 14, equivalent to a loss of approximately USD 11 billion.

Starbucks, based in Seattle, Washington, has been affected by geopolitical tensions these days. The company faced a boycott after a tweet by Starbucks Workers United, which represents many of its baristas. The tweet expressed sympathy for the Palestinians.

An industry analyst said the boycott, which began after Israel’s actions in the Gaza Strip, is a challenging situation for the company’s future.

Starbucks shares fell for 12 consecutive trading sessions, the longest such decline since the company went public in 1992. The company’s stock is currently trading at around $95.80 per share, well below its yearly high of $115.

However, the company has denied doing anything wrong on its part amid the latest controversy. But it faces the challenge of maintaining its brand reputation amid divisive global issues.

In a recent call with analysts, Starbucks CEO Laxman Narasimhan said he remains optimistic about the company’s diversified channels and its ability to engage customers despite macroeconomic challenges and changing consumer behavior.

The recent boycott of Starbucks is part of a boycott by several global brands in support of Israel. Starbucks in Egypt reportedly fired workers in late November after being financially hit by the boycott. The company was forced to take such a step to cut expenses, according to sources.