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Cosi Inc. Message Board

  • golfer18us golfer18us Jul 10, 2011 6:17 PM Flag

    Let me get this straight

    Are there really investors who want to invest in a concept with the following attributes:
    * NEVER made money since it was founded...and that's not because it's highly leveraged...it has no debt so it's losing money at the operating level!
    * the location count continues to decline...and selling them to franchisees only masks the issue. In the past two years, franchisees have closed a net 4 locations. Overall the concept has fewer and fewer locations each year. If it's so darn good, why do they keep closing?
    * they lost money in Q1...again...and it's unlikely they'll make money this year.

    You may say "but, they have cash and no debt...they can hang on"...and I would tell you that they have over 1/2 their leases coming due in the next two years. Given the losses, it's likely that they'll be faced with either (1) not renewing, (2)renewing, or (3) selling to a franchisee prior to lease expiration. While this company has no debt, the operating leases total $50 million (at the end of last fiscal year)and that's a real obligation so it's not out of the question that they could seek bankruptcy protection given that burden.

    The facts don't support investing in this stock. I guess if you want to gamble, go for it. Just don't make it grocery money.

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    • some stocks will go up purely because of momentum/speculative players juicing the stock, but you're right...this company is not for investors. fundamentals are extremely poor and cash will only last 12-16 months if losses continue.

      COSI just isn't a well-known brand like Subway and the days of ordinary office workers wasting $7+ on a daily sandwich are over. too many people worried about their retirement options, devalued house, credit card debt, and job security. 5-years ago, we all spent freely because the economy was great (or so we thought) and that $7-10 "premium convenience" lunch was fine. in many cases, our employer paid for the working lunches. times have changed and COSI hasn't adapted well.

      i wish there were 400,000+ new jobs each month and our economy was booming like china, but it's not...and until that happens the $7+ "premium convenience" lunch (not including drink or chips) is a bad investment.

      good luck to shareholders. i hope you catch a wave of momentum fast-money players to get you out of COSI clean.

 
COSI
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