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The Coffee Stock: Starbucks woos the engaged with free coffee, lessons

Vienna, Austria is largely credited with creating the coffee house culture. Its venerable institution of a coffee shop, Café Central, was meeting place, workshop, living room for writers and political firebrands of all kinds. Revolutionist Leon Trotsky was just one famous patron. At the coffee house, you could be sure to connect with the most passionate and literate people around.

While that culture persists in Vienna and many European cities, critics argue that Starbucks (NASDAQ: SBUX), McDonald's (NYSE: MCD) and Dunkin Donuts have devalued coffee's key role in literary and political engagement. I argued last month that this was one of the key failings of Starbucks over the past several years and that the company should endeavor to reclaim the coffeehouse feel. And small steps indicate the chain is trying. Publication of the GOOD sheet and offering free coffee for those who vote seem designed to target the engaged. [Aside: Starbucks changed its qualifications to "anyone who asks" to keep on the right side of election law, which generally bars inducing someone to vote -- or convincing them not to vote -- by giving them anything of value.]

By aligning itself with an ad campaign that encourages voting and prompting its customers to delve deeply into a potentially political issue with its GOOD sheet, Starbucks is clearly attempting to rebrand itself from the accessory of the clueless pregnant celebrity (remember Britney Spears and Jennifer Garner while pregnant, always with a Starbucks cup in hand?) to the brain fuel of the cerebral community organizer. As bold and cutesy stuffed animals and children's insulated mugs are replaced on the counter space with an explanation of the economy or a description of U.S. immigration statistics, it's clear the company is working toward coffee house and away from its industry category ("quick service restaurant").

Recent management comments in last week's New York Times point to more ways Starbucks is working to appeal to the engaged, intellectual consumer.

Continue reading The Coffee Stock: Starbucks woos the engaged with free coffee, lessons

This week's Darwin Award goes to... Diebold!

Tuesday's Brad Blog brought my attention to the famed Princeton Diebold (NYSE: DBD) Virus Hack, last summer's break-in of Princeton University's Diebold touch-screen voting system. Princeton's study found that to steal an election, all someone had to do was gain access to the system and slip a vote-swapping virus onto a single machine, which then had the potential to affect every other machine in the country and -- Ta da! Election stolen, game over.

After discovering the hack, Diebold, which specializes in technology that people use to access their services whenever and wherever they may choose, posted a picture of "the key" on their Web site -- the same key that opens every single voting touch-screen machine in the system. Of course, J. Alex Halderman, one of the people involved in the Princeton Hack, had a friend who discovered the Web page and realized that he could very easily and cheaply make a working copy of that same key right from the photo. Voting security? Not so much.

While Diebold eventually removed the photo of the key from its Web site, it remains to be seen how many saw it and had the same thoughts as Mr. Halderman's friend and how many other voting machines, file cabinets and office supplies are at risk.

Even more frightening, it was announced that Diebold "recently earned certification from the General Services Administration to deliver security integration services that meet the requirements of the Homeland Security Presidential Directive." In addition, Diebold was hired to secure the founding documents of America: the U.S. Constitution, the Declaration of Independence and the Bill of Rights. Maybe it's just me, but the Virus Hack debacle highlights holes not only in Diebold's machines' securities, but Diebold itself. I for one, wouldn't want them working on matters of national security -- if their machines are so easily hacked into, what would that say about our country? I'd like to think that at the very least, our country's security leaders learned a few things from this incident, but I'm going to have to assume that they didn't.

XOM shares set a new high as Alaska voters reject North Slope tax

When voters hit the polls yesterday in Alaska they had a major tax proposal on their ballots. 66% of voters opted to vote against the proposed $1 billion annual tax proposal against oil companies working to develop a pipeline from the state's North Slope to Midwestern markets.

This comes as good news to ExxonMobil Corp (NYSE: XOM), BP p.l.c (NYSE: BP) and ConocoPhillips (NYSE: COP) that could have been looking at a 50% increase in project costs should the tax bill have passed yesterday. The total bill on the pipeline project has been estimated at $25 Billion and had this tax measure had passed, there would have been some serious questions as to whether the major oil companies would be willing to consider planning or future development for the project. For now, it appears clear that the people of Alaska are behind the pipeline and want the oil companies to continue to move ahead.

Shares of all three stocks are up in today's market. ExxonMobil has traded up 1.3% to $73.49 and set a new 52 week high earlier in the session at $73.55. BP is up 1.7% to $68.68 and COP has traded up 2.1% to $62.29.

Election-time madness today, as market awaits results

What will the market's reaction be to the mid-term elections that are hopefully flourishing all across the country today? Well, if the U.S. Congress is any measure -- and it is -- the possible change in leadership from the 'Pubs to the 'Crats could cause some market whining and could send a minor -- or major -- spook into the marketplace this week. And we all thought Halloween was over by now.

A Republican leadership is generally more business-friendly in terms of policymaking than a Democratically-controlled Congress, and that fear alone could cause a sell-off or other strange and potentially harsh effects tomorrow and the rest of the month once the results start pouring in tonight after the market closes.

I am a huge fan of regularly changing the majority party in control of the U.S. Congress since it keeps business leaders on their toes and thwarts complacency and glad-handing. "Stirring the pot" is healthy for the economy and business in general in the world's largest economy, and we may see that happen today if the Democrats seize control of the House of Representatives. The Senate also up for grabs; it would take six seats changing hands for the Democratic party to stake its claim there as well. If that happened, President Bush would be in a quagmire for the rest of his administration.

What's your take? Will the election results today keep the market's status quo intact -- and growing -- or will possible majority changes cause strife in the White House and the two houses of Congress? Story at about 11:00 -- or shortly thereafter.

Wal-Mart to elect board of directors by majority vote only

Wal-Mart Stores, Inc. (NYSE:WMT) does take some shareholder suggestions to heart, although many of them are quashed by the board. Wal-Mart's board must now be elected by a majority vote instead of a plurality vote, something that has been brought up several times at annual shareholder meetings.

Wal-Mart also said that plurality voting will continue to be used in contested elections when the quantity of director candidates surpasses the number of available positions, which makes sense and is not a change from previous policy at all.

Why make the change to the voting and election procedure now for Wal-Mart? It seems an odd time, but perhaps there is something underway soon with the Wal-Mart board that makes the announcement of a majority-elect board some kind of advantage for the world's largest retailer.

Rob Walton, Wal-Mart's board chairman, said, "We believe that due to recent changes in Delaware law, the majority vote standard is now in the best interests of the company and its shareholders." This is most likely true, although the specific changes to state law where Wal-Mart is officially headquartered would most likely apply to other public companies with registered headquarters located in Delaware.

Symbol Lookup
IndexesChangePrice
DJIA-93.7910,197.47
NASDAQ-17.882,149.02
S&P 500-11.271,087.24

Last updated: November 13, 2009: 12:20 AM

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