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Buffalo Wild Wings Inc. Message Board

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  • tiempolargo tiempolargo Mar 23, 2009 2:32 PM Flag

    Dare I say..

    was in austin tx sat and stopped by bwld to see how things were going. cedar park location (north austin tx) was difficult to find behind a movie theater surrounded by ten other restaurant choices. arrived at noon. i counted ONE family eating at table next to mine and a guy at the enclosed bar. a staff of many twiddling their thumbs. food (tenders and boneless wings) was atrocious. absolutely horrible. you eat better and cheaper at kfc. service fortunately, was quick. by the time i left an hour later another four tables were filled. four by 1 pm.

    as i left i asked the three employees doing nothing at front of rest if things would get busy as UT longhorns v Duke game approcached. i got a hmmmmm, maybe, uhhhhhh.

    trouble brewing in chicken tender land.

    this one will be gutted by october. mark my words.

    long puts.

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    • bwld and cmg are birds of a feather.

      there is a theme at work here:

      ...Jared Harris, a doctoral candidate at the University of Minnesota, and Philip Bromley, a management professor, studied “435 companies that were forced to restate their financial statements with similar companies that did not run into such problems,” according to the Times.

      The report found that (a) companies granting large compensations in the form of stock options are “more likely to go broke”; (b) of the “companies where bosses got 92 percent or more of their pay in options, about a fifth ended up faking their books within five years”; (c) bosses of companies that are doing much worse than their competitors may feel a need to cheat; and (d) companies that turn in a very good year have a propensity for faking numbers the next year.

      short-term myopic growth to drive exec comp is a slippery slope. but even ignoring the voluminous, convoluted and opaque exec comp package disclosures in the bwld proxy and the 1 and 5 chance according to mr harris that bwld is cooking more than wild wings, the headwinds are far too strong for bwld to support these grossly inflated valuations here.

      you see the secret wings sauce at bwld is rapid expansion which was largely driven by the franchisees. that game is dead as indicated by the slowdown in franchised operations and the increase in company owned locations. but bwld is running out of cash to buy back franchisees (see vegas) and to open new locations.

      hoping to put some spice in the sauce on the cheap by buying poorly performing mexican taco stands is a horrible porposition and doomed for failure.

      but everyone knows this! that is why the world is short bwld. it is only a question of timing!

      disclosure: i am betting against both bwld and cmg and am long puts on both

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