Friday, October 14, 2005

Caribou Coffee and Islamic Sharia law

Question: What do Caribou Coffee and the Taliban have in common? They both operate under Islamic Sharia law.

Rambix has written about Caribou previously here: "Which of the following does not fit with the others: Coffee, stocks, or Islamic Sharia law?"

Caribou's stock has had trouble since the public offering, per this Red Star story:

Originally priced at $14 a share, Caribou stock opened at $15.51 a share on Sept. 29 and then sank to $11.35 by the end of its second day of trading. By Thursday, Caribou was at $9.96 a share, 35 percent off of its high and 29 percent off of its original price.
What could the reaon be?

CEO Michael Coles, who is limited in what he can say about Caribou's prospects because of regulations related to the IPO, attributes the decrease to the vagaries of the market.

"Considering we haven't put out any information, it has less to do with Caribou and more to do with the market."
Or could it be this:

Besides improving operations, Coles has his hands full addressing the public relations problems related to the 60 percent stake in Caribou owned by Bahrain-based Arcapita Bank, which was formerly known as First Islamic Investment Bank.

Arcapita -- which also owns major stakes in Cirrus Industries, the Minnesota-based aircraft manufacturer; Church's Chicken stores, and Loehmann's, a specialty retailer -- operates the business in accordance with a body of Islamic principles known as Shariah.
Is it unreasonable to believe that in these days of Islamic terror, the Taliban, and with the US at war in a Muslim region that a company that operates in accordance with the philosophy espoused by our enemies, might have some problems?