Saturday, October 01, 2005

Which of the following does not fit with the others: Coffee, stocks, or Islamic Sharia law?

What do you get when you cross an IPO (Initial Public Offering of stock) with a company that operates according to Sharia law, the same Islamic law which the Taliban observes? You get: "Caribou shares keep falling on 2nd day of trading".

Caribou stock closed Friday at $11.35 a share, down $1.65, or 12.7 percent. The stock started trading at $14 on Thursday, and finished its first day off $1, or 7 percent.
What might be the cause of the decline?

The prospectus said that Caribou's majority shareholder is an affiliate of Bahrain-based Arcapita Bank, an investment group formerly known as First Islamic Investment Bank. The prospectus also said the company conducts its business in accordance with Sharia, or Islamic law. An analyst quoted by Reuters said investors did not understand what Caribou meant by saying it ran its business in accordance with Islamic law.
I wonder why the investors didn't understand that they were being asked to contribute money to a company that operates by the same philosophy as Al-Qaida and the Taliban? It's a real brain-twister.

Rambix has written about this previously: "Caribou coffee and Islamic Sharia law"