How to lose $11 billion in one month

Plus: A reprieve in Guyana and Venezuela's border dispute.

Friday, December 15, 2023 Good afternoon,   Here's the agenda today:   UP FIRST: Starbucks's $11 billion loss, explained   CATCH UP: A peaceful path forward in South America?   —Dylan Scott, senior correspondent UP FIRST Starbucks's $11 billion loss, explained Nicolas Economou/NurPhoto via Getty Images Starbucks is worth about $11 billion less than it was in mid-November — but you can't necessarily blame the social media-driven boycotts over the company's stance on the Israel-Hamas war.   Let's back up here, in case you missed it: Starbucks has come under fire from supporters of both Israel and Palestine over its public messaging on the conflict in Gaza.    It started with Starbucks Workers United, a pro-labor organization that has pushed to unionize the company's workers, tweeting its solidarity with Palestine shortly after the October 7 attacks. The tweet was quickly deleted and disavowed by the group. But it was already too late.   Starbucks, which has a … let's call it contentious relationship with the labor activists within its workforce, sued over the tweet. It alleged that the use of its copyright and trademarks in the initial message could have been construed as the company supporting Hamas. The workers' organization then countersued and claimed defamation.   Somehow, both the right and the left ended up enraged by this sequence of events and called for coffee drinkers to boycott Starbucks. Republicans and Jewish organizations were furious over the initial tweet. Supporters of Palestine fumed over the company's response to the union message, interpreting it as Starbucks putting itself on the side of Israel in this conflict.   Both sides had reasons to celebrate — and claim credit — as Starbucks's stock price dipped 9 percent over the past month. The only problem, Vox's Emily Stewart writes, is the boycotts don't appear to have had anything to do with the company's poor financial performance. Starbucks's sales have been falling short of Wall Street expectations. To give one example, the surge in foot traffic for the company's Red Cup Day (when it gives away reusable coffee mugs) was much smaller this year than it was last year: Just a 32 percent bump over a regular day versus 81 percent the year before. "I don't think it's the protests that are driving this," Sara Senatore, senior research analyst at Bank of America, told Emily. Let's be frank: Nobody knows exactly why stock prices do what they do. All we know for sure is investors do not like what they are seeing from the company right now. Starbucks has other challenges. Price hikes could be driving coffee drinkers to cut back, and the weakening Chinese economy also poses a threat to its core business. It didn't help that Starbucks started Q4 with high expectations, giving it farther to fall when the reality didn't meet those projections.  The battle between Starbucks and its workers continues. Nearly 400 of the franchise's 9,000 US locations have unionized and staff continue to put pressure on the company to meet its demands. In perhaps a hopeful sign, corporate reached out to the union with a proposal to resume bargaining in January 2024. Whatever is going on, the company seems eager to move on and move forward. Read the rest of Emily's analysis here. CATCH UP A peaceful path forward in South America? Roberto Cisneros/AFP via Getty Images Venezuela and Guyana are stuck in a territorial dispute over one particularly oil-rich swath of land, but the two sides announced they intend to find a peaceful resolution to the matter.   The countries' two leaders — Venezuelan President Nicolas Maduro and Guyanese President Irfaan Ali — shook hands on camera at the conclusion of a day-long summit dedicated to the issue. They also agreed to form a joint commission to resolve the dispute, though Guyana still says it wants the International Court of Justice involved and Venezuela does not, CNN reports.   At issue is the Essequibo region, which comprises most of Guyana's land area and about 128,000 of its 730,000 citizens. The dispute dates back to the colonial era, when the United States adjudicated a dispute between the United Kingdom (then in control of Guyana) and Venezuela over the territory, handing control of most of it to the UK (and thereby putting it in Guyana once the latter became independent). But Venezuela has continued to protest its case.   The two sides have been ostensibly striving to find a permanent solution since the late 1960s. But recent events have brought the dispute back to the fore: Venezuelans voted recently to create a new state within Essequibo. Following a popular referendum earlier this month, Maduro ordered new maps to be drawn and pointedly disregarded the 1899 agreement that created Guyana's modern borders. Guyana regarded the Venezuelan actions as an "existential" threat that could lead to bloodshed. Ali said his country had begun conversations with the United States (with whom Guyana has a complicated defense cooperation agreement) and with Brazil in preparation for the need to defend itself if Venezuela moved forward. The two countries are pledging not to go to war. This week's summit did not lead to a resolution to the diplomatic disagreement, but the sides have promised "not [to] threaten or use force against one another in any circumstances" and to "refrain, whether by words or deeds, from escalating any conflict or disagreement." A joint commission of Venezuelans and Guyanans will try to find a path forward. The commission will be led by both countries' foreign ministers, with the assistance of their technical staff. They are expected to provide an update within three months, after which there will be another summit in Brazil.  VERBATIM 🗣️ "Without getting greater detail as to what the abstract call for genocide would be and what sort of pattern of conduct or behavior it might be a part of, the college presidents were put in a situation in which they could not answer [Rep. Elise Stefanik's viral] question with one word." —Nico Perrino, executive vice president of the Foundation for Individual Rights and Expression, an organization that advocates for free speech, to Nicole Narea on the uproar over university leaders' testimony to Congress on free speech and the Israel-Hamas war. Stefanik's question was: "Calling for the genocide of Jews, does that constitute bullying or harassment?" [Vox] AROUND THE WEB Inside the Supreme Court's decision to overturn Roe v. Wade. Painstaking reporting from inside one of America's most secretive public institutions stitches together the most thorough narrative yet of what led to the justices' historic and controversial ruling. [NYT] How tainted chemotherapy drugs ended up in pediatric cancer wards. There has been a lot of ink spilled in recent weeks about the poor quality of many of the drugs the US is importing, but this Bloomberg expose may be the most haunting example of the problem. [Bloomberg] The worst year for humanitarian aid in a long time. The UN reports a staggering shortfall in support, with donors providing less than $20 billion of the nearly $60 billion the organization needs to enact its humanitarian agenda. [Devex] MORE READS FROM VOX A new approach to measuring what's going on in our minds   What Trump has already taken from us   Why Biden may give in to Republican demands on immigration   Big Meat just can't quit antibiotics   Today's crossword ONE LAST THING Enjoying the Sentences newsletter? 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