On Wednesday, TheStreet's founder Jim Cramer, who also manages the Action Alerts PLUS charitable trust portfolio, said he was leery of Starbucks Corporation (SBUX) . Specifically, that's when Cramer said if management failed to impress investors, SBUX stock could fall to $55.
With shares plunging about 10% on Friday, it's safe to say that Cramer nailed the move. So what does he see coming for Starbucks?
Cramer spoke with CEO Kevin Johnson Friday morning on CNBC's "Squawk on the Street" show. While he said he was excited about Starbucks doubling down on its China investment, there was too much uncertainty in the business.
After selling some of its stake at $64, Cramer planned to buy it back in the Action Alerts PLUS charitable trust portfolio if SBUX stock "really got hit." It's definitely getting hit, but it's not inspiring him to buy the stock.
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"Frankly, there was enough uncertainty in my interview with [Johnson] to not embolden me to buy back what we sold," Cramer reasoned. Management will "probably have to guide down next quarter" and if that's the case, shares could fall to $50, he said, adding "that's disconcerting."
Starbucks has been a core holding in the portfolio, especially when Howard Schultz -- currently serving as executive chairman -- was running the company. Starbucks' run isn't over and that's not necessarily a slight against Johnson.
"But right now there's enough uncertainty that I find it not inspiring," Cramer said, concluding that it "doesn't make me want to reach for the stock."
Starbucks shares rose 0.6% to $54.32 on Monday morning.
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