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Shake Shock: Spot The Fast Food Outlier
Following news that recently IPOed cult burger joint Shake Shack is preparing to start selling... chicken, its stock has gone even more parabolic than before and is up nearly 10% today alone hitting a new all time high $3.2 billion market cap.
While this relentless rise is no doubt facilitated by the stock being hard-to-borrow and having a triple digit borrow cost, thus making shorting effectively impossible, one quick look at fundamentals, irrelevant as they may be in this market, put the company's valuation per restaurant in perspective not only to such established fast food names as McDonalds, but other recent "hot" restaurant debuts.
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Is this a short in the Yellen newsletter?
Moar parabolic'er. .. fixed it
Yellen told the McDonald's protesters to buy ShitShakeShak for their inheritance that they would have if only they were wealthy.
Statistics.....phhhhht.
They have NO P/E because they're losing $1.03 per share.
Tell me how valuable they are in a year !
You'll be sorry when they unleash the "Breakfast Burger"! Look out Apple when this bohemoth takes over the A.M.!
But they make it up on volume!
… they make it up
ENTIRELY !
Like FB.
No Options traded? Fuck I will have to wait.....
they must have gotten a good deal on wholesale chicken, from somewhere.
I'd guess Tyson, but then again, I don't really consider that to be chicken.
China?
Wow, that is more than the Grilled Cheese Trucks!
Totally different market, burgers could never be sold from a truck.
WTFN?
took the words out of my mouth (with the cheese)
The word is "over-subscribed"
I loved Password.
Optimism and rumors will take you far nowadays.....
Every kid loves a new balloon full of FEES.
A real burger joint:
http://www.buckhornburgers.com/about.html
Mine is Jake's Hamburgers in Dallas.
Great burgers, and great environment to enjoy them in.
Liberty is a demand. Tyranny is submission.
The Buckhorn is in San Antionio, NM. It's about a hundred miles from me, so I don't frequent it very much for the obvious reasons. It's in a sleepy little shithole, and it got ranked in the top 10 in the nation for burger joints several years ago. If you're ever on I25 in Southern NM, stop off. The place across the street, the Owl Cafe, isn't bad either.
More local to me are Bob's Burgers and Blake's Lota Burger. Sometimes the chile at Blake's will make your nose run.
You ever go to Maria's in Santa Fe homey?
http://marias-santafe.com/menus/
I sometimes go there with my friend Pico.
https://www.youtube.com/watch?v=HmtD-q_Hm0k
McShithole
https://www.youtube.com/watch?v=m02q_Bt9LeI
too bad i cant buy put options on this
Put options are always a sucker's play. Not only do you have to pay the bid ask spread on the option which is sizable in percentage terms, you have to pay the insurance premium for requiring the seller to take on the risk, and you pay exorbitant broker fees again as a percentage.
At least make it a little bit challenging for the smart guys on the street to take your money.
It's a New Yawk Thang!
Where's Chipotle?
The center of the Chipolte universe is the toilet bowl.
Kinda off topic, but what happened to the 7.5 year itch? weren't we supposed to have crashed by now?
http://www.zerohedge.com/news/2015-04-24/75-year-itch-starts-next-week
And don't get me started about this being a schmegma year.
Can I have a liquidated lumber flavored drum stick to go?
Prepared in China. Fried is USA.
I'll have an oak flavored milk shake with mixed hardwood sprinkles please.
QE3 Pork Shack ... comming SOON!
Right now, I'm in Wisconsin. I see a real market here for a chain of CHEESE SHACKS!
Deep fried bacon wrapped cheese shacks.
$80.00 is the line in the sand. it breaks that, stock could get smashed purely on techincals (once it broke up thru a few days ago after initially setting resistance there on the 6th of may, it was all-systems-go straight up as stops got tripped & im guessing thats where they are now to the downside as well).
fundamentally, if im the MCD CEO, im not buying back my own stock or issuing dividends. im buying as much SHAK as i can and possibly reversing the error of selling their CMG stake. MCD is F'D so they may as well take a shot IMO with fast casual before they go the way of the dinosaur.
all that being said, i think i heard the valuation that ZH i believe is stating here (analyst on CNBC noted this) that SHAK is valued at $45 million per store? they better intend on growing & expanding like a NFLX or AMZN if thats the case. any downtick in their sales and this thing will get mangled from that point of view IMO. really walking the tight-rope on a fundamental basis (probably why i don't really use funny-mentals; can cook the books, can't cook the charts - price and volume never lie).
Sorry but Al Gore hasn't invented streaming burgers and fries yet. Word is that Brian Williams had to take one for the team the last time the simulated it in the lab.
my point being they are gonna have to have the mind-set where they wanna open alot more SHAK locations & have extremely high level of successes as they are in their NY locations are right now. extremely unlikely because A. they have nailed lightning in a bottle for the time being in the NY market and B. there is zero guarantee they can keep up this level of volume. extremely high risk scenerios especially given where the stock is right now on a fundamental basis; they are factoring in everything of alot of things to go right.
+1 for actual discussion instead of the 1-line snark that ZH is devolving to...
EET MOR CHIKEN.
Long Wendy's : Short Shake Shack
http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1432238400000&chddm=25807&chls=IntervalBasedLine&cmpto=NASDAQ:SONC;NYSE:MCD;NASDAQ:WEN&cmptdms=0;0;0&q=NYSE:SHAK&ntsp=0&ei=Vg9eVfnAB5WamAHU_YBY
Isn't a shake shack a strip club?
you're thinkin of the 'shoe show'...
Do they have a Chinese CEO and what happens if he quits?
Here's the Madison Square Park real time , Shack cam. lmfao.
Madison Square Park, NYC | Shake Shack
Look at the sheep eating their $5-7.00 pink slime.
I checked it (at 3pm EST) and they were showing a video grab at 12 noon EST (with a huge line of course)...a little reality distortion to support an overblown stock price or was the webpage time screwed up?
Even 1 milllion per restaurant sounds way too much
Americans are so trained and conditioned brain dead, they cannot wrap their heads around what a burger joint is.
Reminder all you..
A BURGER JOINT IS A PLACE YOU GO TO AND GET A GOOD TASTING BURGER, FRIES AND DRINK.
That is all, not very complicated.
Just like in the 1950's, If it sucks you go to a different one.
Its valuation has nothing to do with its product stupid.
"Burger joint" is a fancy term for _Choke n' Pukes_ which is what they really are when one factors in all that grease, and transfat. The concept of 'good tasting' is not applicable due to the fillers added to hamburger meat during the food processing stage. China reported 'saw dust' in their McDonalds 'burgers' this past winter. Recall of those 'burgers' was issued, and McDonalds Public Relations went into overdrive to recoup losses. Frankly, if you ate a tasteless faux burger filled with 'saw dust' to add filler, and make moar profit, you would not claim 'taste' was a logical reason to eat at McDonalds in China. If all competition is using the same beef-to-saw dust mixture at fast food outlets all along the strip, you will eat what they have, and probably like it if you are hungry enough. Industry experts claim that the taste factor is mere 'salt' and 'sugar' by definition.
I don't think you even have to put up the buildings or sell anything anymore. Just tell them that you are going to do whatever, give the business a catchy name, and watch the stock take off!
Etsy?
Their shakes are clearly "bubblicious".
Can I have a biker shootout with that order?
And a side order of a false flag.
Waco needs a biker in the wheel chair pushed by Gene Rosen who gets his legs blown off (pretend only).
https://www.youtube.com/watch?v=3A8JDqHhUD4
Full retard market
If you shake it more than once
You are playing with it.
Shake should do a buy out on MCD and see the share price of the new entity soar 6 times. That is the new normal.
after that deliver burgers by drone merge with AMZN and triple again.
edit, my bad... was thinking of another place... this place is trash
This is the innovation that made America #1. I get what everyone is saying.
But there was a family from my town that ran a tasty-freeze type walk-up that was only open about 6 months out of the year and the entire family lived on the incoome from that one location.
I had to wait for somebody outside a snow cone stand in Houston one time. This snow cone stand was outside the basketball court and the local middle school. It had a line for hours. I sat there and watched getting rich, selling frozen water and sugar for $1 a pop. It's the kind of business that lets poor people rise up.
Did they have the proper licenses, health code score posted, posted caloric intake, 50 ft from a fire hydrant, not obstructing foot traffic, thermometers in the cold bins, sanitation options, healthcare?
Pronosticos matematicos acciones EuroStoxx50
http://www.aseperfi.com/net/aatricnl/inftricmlsx5e.htm
How could this possibly be? Hmm......
Let's see, the alleged "purpose" of an IPO is usually to obtain capital for expansion, acquisitions, and general corporate purposes. I know, it's really going to go for hookers, blow and booze, but bear with me.
The ratio shown as such a big deal looks like a red herring to me.
The valuation from the IPO makes the numerator big, while the immaturity of the company makes the denominator small, because they haven't used the IPO money to expand the number of stores yet.
So the "value/store" is artificially large.
If the post IPO valuation was $1, and they had no stores at all, the valuation per store would be infinite. Like a computer dividing by zero, this would be pathological, or as George Carlin would say "a sign of a dangerous mental condition".
But I'm sure this is intuitively obvious to all the propeller heads around here.
Vinz
There's always a spoil-sport.
Let me know how that works out for you
"I cannot help but raise a dissenting voice to statements that we are living in a fool’s paradise, and that prosperity in this country must necessarily diminish and recede in the near future."
- E. H. H. Simmons, President, New York Stock Exchange, January 12, 1928
IF Shake Shack is ONLY located in high-price cities where each restaurant can do >20% take-out biz and turn tables rapidly, the valuation may be justified. The chart isn't an answer, but rather the starting point for insight.
Fair point....
...but $50mln?!?!
That may be just a tad of a stretch...
Pronosticos Mcdonalds
http://www.aseperfi.com/net/aatricnl/inftricmlmcd.htm
Pronosticos Mcdonalds
http://www.aseperfi.com/net/aatricnl/inftricmlmcd.htm
Chicken is ok.
Tastes like chicken?
Seems sustainable.
Meh, I've got artisanal belly buttonlint infused tater chip crumbs that's worth more than that.
It's actually worse than Zerohedge is saying. Only half the of locations are company stores. There is over $100M of market cap. per company owned store!!!
wait until the bird flu hits...