Yesterday afternoon, federal prosecutors charged Fredrick Douglas Scott, the self-described “youngest African-American hedge fund founder in history,” with engaging “in a wire fraud conspiracy to steal hundreds of thousands of dollars from investors1,” which he used to buy Caramel Macchiatos, stay in hotels with views of the Holland Tunnel, and bail his friends out of jail.2 At this time, there appear to be several inconsistencies with the stories Scott has told clients and friends, which include:
The claim he manages $3.7 billion.
The claim he makes $96,000/year (“[Scott] filled out a financial affidavit claiming his salary is $96,000. Scott then told pretrial services he makes $200,000 but takes home only $50,000 a year, prosecutors said. Scott’s personal account at TD Bank showed over $700,000 “flowing in and out,” but as of April 30 his ACI Capital Group account was overdrawn by $91.24.”)
The claim his in-laws were his get out of jail free card (“Scott [has said] his wife’s parents have ‘Italian diplomatic status,’ and he boasted to the FBI that if he got in trouble, she would be his ‘ace in the hole.'”)
Will we find out that the above weren’t so much lies as misunderstandings in the days to follow? Maybe! At this time, however, the most pressing issue Scott may want to resolve would be that of his representation, which is currently not returning his calls. Read more »
The rumors that today Apple would introduce a redesigned iPod featuring no buttons, knobs or screens of any kind, instead employing newly-patented mind-reading technology for functionality; produce a force-field causing all Zune products within a 200-foot radius to immolate, rendering them as useful as they are in non-burned-to-a-crisp state; and come with videos personally damning to Microsoft founder Bill Gates, preloaded did not pan out, and for that Jobs-y Boy is paying dearly. Sure, we got a custom ring-tone maker; slashed prices on the iPhone; a 2.5 inch screen video Nano in red, silver, blue, green and black; a new name for the iPod: iPod Classic; 160 gigs (that’s 40,000 songs, 20 more than there are in existence); a touch screen; Wi-Fi; and Safari / GOOG / YHOO browser (basically: an iPhone without the Phone), but it wasn’t enough–shares are down 3.5%.
Are we asking too much? All the news was good news (except for the price cut on iPhones. That announcement was not good and by not good we mean “bad,” for those of you–Cliff Mason–who spent $599 for your iPhone on June 29 instead of $399 this weekend, and for AAPL investors, despite SJ’s spin of, “it’s so popular we want more people to afford it!” Just like houses. Little subprime humor? That’s okay, I’ll let myself out) but it wasn’t the kind of huge gains/NO RIGHT CLICK BUTTON ON YOUR MOUSE news we’ve come to expect from Senor Jobs. He did, however, change the color of his mock, swapping brown for black, and perhaps that’ll be enough to get things up by the end of the day.
Apropos of AAPL, it was also announced today that Apple will have a wireless music deal with Starbucks, which can only mean this thing is about to drop like a bag of dirt. Apple iPod Special Event: The Live Blog [CNBC] Apple announces new iPod nano [engadget] Apple’s new iPod Classic [engagdet]
SBux will increase prices on coffee, frappuccinos, vanilla bullshit latte cappa things and other drinks by an average of 9 cents per cup* starting next week. Starbucks claims the move is necessary to help offset the “soaring costs” of milk and other commodities.
Morningstar analyst John Owens said that “There will probably be some grumblings initially, but at the end of the day, I think people aren’t going to change their pattern of buying,” because we are lazy, caffeine-addicted sheep (I’m on #4, how ‘bout you?).
The increase—the second in less than a year, following October’s 5 cent/drink bump—effectively levels the price of a grande beverage to that of a gram of blow, the latter of which you don’t have to wait for on some ungodly long line. We’re not saying, we’re just saying.
Shares of Starbucks are up 15 cents to $28.31. Starbucks raising U.S. drinks prices next week [Reuters]
*Listen, people. We get that it’s a negligible increase. But we’ve got to draw the line somewhere. Ours will be at $8.50, which is extremely generous considering that we get iced coffee, and, as everyone knows, the iced drinks are where the ‘Buck screws you. What’s your limit?
We are allergic to the term “barista.” It sounds like some sort of Latin American revolutionary rather than a girl who has memorized the correct way to order a “double tall skim latte.” That said, we always tip the barista although we’re not sure why. We hardly tip anyone who isn’t providing whiskey across a bar. We never really thought much of it until today’s post from TwoBlowhards.
So now we’re curious about where the DealBreaker readership falls on these things. To tip or not to tip, that is the question. Leave your answers in the comments below. Tip Jar Hitting [2Blowhards]
Everytime you fool yourself into having a milkshake at Starbucks by calling it a ‘coffee-drink’ you starve some kid with flies on his face. At least, we think that’s the message of this faux-Starbucks advertisement.
We literally howled with laughter this morning when Starbucks said it had lost revenues because it was making so many of those sugar-coated cold drinks in the hot summer. But maybe we were too quick to judge. Look at the line for Starbucks outside of Barry Ritholtz’s office.
Makes us love the little deli across the park from DealBreaker HQ even more. No lines ever.
Wait Time Curbs Sales at Starbucks [The Big Picture]
CNBC keeps running a trailer for an interview with Starbucks CEO Howard Schultz, where Schultz’s major soundbite is:
If you want achieve your dreams, you have to dream big…
Schultz did** a business book a few years ago called Pour Your Heart Into It, and wouldn’t be surprised if that soundbyte was a chapter heading. The only problem is that it makes no sense.***
But frankly, we’ve heard worse. And you have, too. Admit it.
So we’re collecting dumb business soundbytes. Send to firstname.lastname@example.org with attribution (or leave suggestions in the comments.) The reader who submits the Dumbest Business Soundbyte gets a copy of Schultz’s book, good for use as a paperweight for loose pitchbook pages, a doorstop or a beer coaster.
** We’d say “wrote a business book”, but who are we kidding?
***By that logic, dreaming smaller would result in failure to achieve smaller, ostensibly more easily achiveable dreams. And dreaming even smaller would result in even more failure to achieve even smaller dreams. And when a small dream is tucked inside of an even smaller dream, inside of an even smaller dream, it’s a failure inside a smaller failure. And when a small dream inside a small dream…