Keith Hylton on Starbucks Boycotts

The Boston Globe View Original Source

Boston Globe – ICLE Academic Affiliate Keith Hylton was quoted by the Boston Globe in a story about the impact of consumer boycotts on Starbucks’ stock price. You can read full piece here.

Keith Hylton — a Boston University professor of law with expertise in economics, labor, and employment — said there are many economic factors that influence a company’s market value, but boycotts can’t be ruled out of the question.

“Can a boycott be responsible for what we’re seeing? It certainly could be,” he said.

…Hylton described the decline as the stock market’s projection of Starbucks’ future value, with “future” referring to the next couple of months. While the stock market is always fluctuating, Hylton said Starbucks’ recent loss is outside the realm of normal loss and gain.

“That doesn’t sound like a regular up and down,” Hylton said. “Nine percent is pretty big for a stock market loss. That doesn’t happen day to day. That’s a pretty significant impact.”

…Hylton said boycotts can have extremely powerful effects on the value of a company. The wide reach of the current Starbucks boycott likely played a large role in the company’s decreased value, Hylton said.

Another potential reason for a dip in market value is a mass loss of customer interest, Hylton said, which is likely not the case because the current losses are so significant. He added that, when international, boycotts can have a “super damaging” effect.

“This is unusual. This is different,” Hylton said. “[Boycotters] have connected Starbucks with an international cause.”