Starbucks, SpaceX, and the Airbnb Effect: Three Business Stories That Shaped the Week

The Financial Times reported last week that Starbucks explored acquiring Chipotle—a deal that would have created a $145 billion restaurant giant nearly as big as McDonald's. Investors hated the idea, sending Starbucks stock down 6% while Chipotle rose 8%. But the hosts see a path where this unlikely pairing might actually work, if you think about it differently than a pumpkin spice taco.

The Star-pot-le Proposal: Coffee Beans and Pinto Beans

Starbucks reportedly worked with advisors on a proposal to acquire Chipotle for roughly $40 billion. That would make it nearly four times larger than the biggest restaurant acquisition ever—Burger King buying Tim Hortons in 2014. The deal has an incestuous feel: Starbucks CEO Brian Niccol was previously CEO of Chipotle, and he hired two former Chipotle executives to help turn around Starbucks. Starbucks stock sits at exactly the same price as Niccol's first day on the job, while Chipotle has fallen 40% since he left.

Wall Street sees no obvious synergies. Nobody wants carnitas with their coffee. One investment bank noted the combined company could save $700 million annually by merging corporate departments, but that doesn't justify such a massive deal.