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Starbucks Reporters, Remember the Memo!

Marek Fuchs

Mae West once said: "Too much of a good thing can be wonderful." To which The Business Press Maven would like to add: "Too much of a bad thing can be this week's Starbucks(SBUX Quote - Cramer on SBUX - Stock Picks) coverage."

About every last drop of it gets this week's dreaded Business Press Maven "Back of the Hand" award.

I mean, did I stutter when I made the point back around Valentine's Day that everything the company does in the next bit of history must be seen through the prism of "the Memo"?

Which memo? Well, there is only one ... and everything that happens to Starbucks for the rest of the year should be set against it, seen as either confirming the contents of the Memo or confirming that it's what some at Starbucks claimed it was after it leaked out: a de rigueur attempt at motivation from a master.

That is the only way this story can be told, at least if savvy investors want any sense of how it might end.

You remember -- don't go telling me you don't -- the memo that company CEO and spiritual leader Howard Schultz wrote saying that Starbucks, for which he has evangelical fervor, was losing its way. The spirit of the stores, he wrote upper management in a memo that was quickly leaked to the public, was gone -- right down to the waft of fresh-brewed coffee.

Trouble, we read in one too many headlines, May Be Brewing.

Groaning word-plays about coffee may not be worth a hill of fair-trade beans, but this memo was big news. Probably.

The essential point is that Howard Schultz is one of the few geniuses walking the water of American business today. He is one of the few in charge of a public corporation who has built it to current size and managed it competently, and thus deserves some leeway.

Could this have been some warped yet effective motivational tool, like Starbucks said? Considering that The Business Press Maven, who is hard to impress, has seen Schultz present to Wall Street and would follow him happily off the lip of a cliff -- well, I'm not dismissing that possibility out of hand. At one point, in the aforementioned column headlined "Paranoia's Positive Effect," I even referred to the famous aphorism from Intel's(INTC Quote - Cramer on INTC - Stock Picks) Andrew S. Grove that "only the paranoid survive." Perhaps Schultz was acting out of a healthy sense of paranoia.

But the Memo also easily could have been what it appeared be: an admission that Starbucks, which has been showing some slight signs of being a bit long about the tooth, was -- to mix dental and shipping metaphors -- steering into a nasty patch of weather.

The Memo was nothing to be dismissed or forgotten. Rather, to understand where Starbucks currently stands, each succeeding development, until we have a clear indication, has to be set against the Memo.

Does this initiative or that firing confirm what was in the Memo, show Starbucks to be acting to ward off trouble? Or is it going on like normal?

And what have we seen since? News just weeks after the Memo that McDonald's(MCD Quote - Cramer on MCD - Stock Picks) is introducing its own line of pretentious, overpriced coffee. Then we have the Starbucks shareholder meeting, and rather than focusing on the Memo, the business media go giddy about the Paul McCartney record deal. Second-quarter earnings come, and we see a focus on small-ball developments such as a licensing deal for Ethiopian beans.

And all along, there was little on the Memo except to declare the issue dead. Um, in it, Schultz was talking about longer-term unfolding problems.

Now this week, Starbucks makes a big move replacing upper management, including installing a new chief operating officer, and the Memo is (at least from much of what I see) not even mentioned in business media coverage? If the Memo was purely motivational, then how does this fit in, amid the other slight signs of trouble in same-store sales and increased competition?

It may, considering Schultz's genius, but savvy investors need to be told how. Because for those who remember the Memo, this is looking increasingly like -- ugh, brewing trouble.

If the business media's insect-sized memory does not carry them back to Valentine's Day Memo, make sure you keep it in mind going forward. To paraphrase Mae West: "A good Memo is hard to find."

And before leaving for the weekend, let's touch upon the most amateurish thought expressed in one of the biggest publications about one of the biggest companies. For fun, we'll give this honorable mention for The Business Press Maven's dreaded "Back of the Hand" award.

The Washington Post, writing about Google's(GOOG Quote - Cramer on GOOG - Stock Picks) disappointing second-quarter earnings in (ironically, or maybe not) the same paragraph that mentions a Google-Washington Post advertising deal that some are hoping will save newspapers, allows to pass unchallenged a comment by CEO Eric Schmidt that Google's second quarter is historically its slowest as a mitigating factor. Uh, Google is being judged in comparison with last year's second quarter.

And I have no idea what Mae West would say about that.