Teavana Holdings Inc. (NYSE:TEA)

CAPS Rating: 2 out of 5

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Member Avatar madtownmaxx (34.53) Submitted: 11/13/2012 8:41:05 AM : Underperform Start Price: $10.25 TEA Score: -30.58

Coffee culture. Competition (Private: Davidsons, Fragrant Leaf, etc.).

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Member Avatar ellentk (< 20) Submitted: 9/12/2012 11:05:04 PM : Underperform Start Price: $12.21 TEA Score: -12.01

I totally agree with egabrielle - I own a teashop and have both interviewed and hired former Teavana employees who HATE it. The sales requirements, the turnover of employees, and the bait & switch on the sales floor (who buys 5 lbs of tea!? they'll quickly sell it you at Teavana for a 20% discount!)... all this tells me this company does not have a sustainable business model for the long term in training and retaining staff. Even customers who come into our tearoom say they were duped by Teavana.
Duped customers, unhappy employees who quit - that's not an Apple or a Starbucks where customers love it.

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Member Avatar brownbr1 (< 20) Submitted: 4/6/2012 12:57:15 PM : Underperform Start Price: $19.28 TEA Score: +39.89

A little research on yelp. Compared to local teahouses, which usually gets around 4.5 stars, Teavana seems to average 2-3 stars. Lots of people are turned off about their pushy, commissioned sales staff and high prices. Also, not very many people posting on Teavana on yelp so the buzz doesn't seem to be there.

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Member Avatar chopchop0 (49.01) Submitted: 3/19/2012 11:34:03 AM : Underperform Start Price: $22.23 TEA Score: +48.32

TEA is not the next SBUX

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Member Avatar OREKEV (< 20) Submitted: 3/4/2012 1:46:52 AM : Outperform Start Price: $24.01 TEA Score: -56.47

Starbucks of Tea

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Member Avatar jorgenctva (< 20) Submitted: 1/6/2012 7:28:38 PM : Outperform Start Price: $16.49 TEA Score: -35.76

Fool pick 2012

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Member Avatar egabriellemoranU (53.66) Submitted: 8/11/2011 2:28:04 PM : Underperform Start Price: $24.92 TEA Score: +79.67

Shop or work there for a while, and you'll know why. Employees hearts arent in it, and they treat customers like objects from which to extract sales. They're forced to this mentality because their pay depends on it. While sales is crucial to teavana's success, pushy sales will not do the trick with this highly discretionary, expensive, and unfamiliar product. The only thing that seperated teavana from the competition (on both tea and accessories) is the shopping experience - it sure as hell isn't price that makes people buy from TEA. If the shopping experience stinks, Teavana's got nothing. Do a quick search of "Teavana customer review" on Google or Yelp and you'll see exactly what I mean.

Plus, increasing costs, new entrants into the market, substitute products, and total inability to expand to the fastest growing part of the world - asia - because the product would be spat upon. Much better quality tea is available for much lower prices all across Asia.

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Member Avatar TMF1000 (99.78) Submitted: 7/31/2011 9:28:43 AM : Outperform Start Price: $29.00 TEA Score: -73.24

My stock was entered in at $29. I also bought the stock for my portfolio. The purchase begins what I expect to be a long successful journey for me. When an IPO is announced it can be hard figuring out for sure how much the company will make per share since so many shares are added to the count. I believe they are now making about $0.35 to $0.39, so the valuation is very high. they have about 163 stores, but plan to open 500 stores by 2015. That represents a lot of growth by itself. But the reason I invested in them and plan on adding more is that I am a big believer in the health benefits of loose-leaf tea. I like the taste better than teabags. I think there is a trend in the U.S toward teas and this represents growth opportunities.

There is a downside besides the high valuation - there are no moats for the business. There are other companies that sell loose-leaf tea, but for now this is in my opinion a very underserved niche in the U.S. My fear is that they will expand too quickly, pick up too much debt and destroy what I believe will be a very successful concept. They should have zero debt presently with the $15 million picked up in the IPO. But I can't be sure until they report their first earnings report.

It is my opinion, this stock will be very volatile which will allow me to buy a long-term position and create trading positions too that will help me expand my long-term position with them and expand my portfolio.

I waited for this IPO since first writing about it in my studies of Starbucks a few years ago.

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