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RCI Hospitality Holdings, Inc. Message Board

  • barkingdog78 barkingdog78 Jun 15, 2013 3:10 PM Flag

    RICK's intrinsic value; Wall Street's dirty little secret

    Wall Street sells retail investors on growth stories in near worthless equities, while the Street looks at something else when they invest: "intrinsic value". As someone said:

    "By 'intrinsic value' I’m referring to the worth of a business if it were to cease operating, with buyers offered the chance to purchase all or part of its assets. In barest terms, if you were to turn off the lights, is the company worth anything? "

    No, it's worth about zero to negative when they close up every night.

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    • If Google closed-up, it would have about a million dollars in servers and a couple million in real estate. But that company is worth billions.

      The processes to run the clubs; brand equity in the name; the cost of setting up the corporate structure; the real estate deals; the loyalty of the dancers --- all of those have value.

      dreaming_of_rick and rick_blows_my_stick are jealous that they could not manage a process at a club like the managers at RICK

      Rick is hiring by the way

      Sentiment: Buy

      • 2 Replies to distant_constellation
      • "The processes to run the clubs; brand equity in the name; the cost of setting up the corporate structure; the real estate deals; the loyalty of the dancers --- all of those have value."

        Didn't mention licenses, because they aren't really worth much.

      • Google has proprietary technology with patents.

        Let's see what RICK has:

        "The processes to run the clubs;"- Nothing proprietary about it. Many clubs do the same thing with security cameras. Look at all the clubs in Las Vegas that run fine; RICK closed in Vegas, right?

        "brand equity in the name;" - new clubs have "Vivid;" so Rick's may be showing some brand age and weakness - like it's for dirty old men..

        "the cost of setting up the corporate structure;" - A NASDAQ listing is about $50,000; finding talented managers and employees might be difficult, but how many star managers does RICK have after the CEO. The CEO has a lot of experience and an employment contract, for sure, so that's an asset - but is he worth $700,000, planes, family cars, and stock options annually?

        "the real estate deals;" - about half encumbered with debt per CC, right?. NY W. 33rd deal extended and questionable now - where's that $18M financing? - some dealmaking.

        ""the loyalty of the dancers" --- Something like 1700+ dancers bringing hybrid collective/class action in NY - some loyalty.

        So let's add it up:

        CEO has management experience - granted; CEO's decision making, such as overpaying on deals - questionable; Other RICK personnel and management depth - questionable.

        Real estate - about $40M equity maybe, based on CC figures.

        NASDAQ listing.

        Goodwill on the balance sheet - questionable; could be impaired?

        Then subtract:

        Liabilities: Debt/Some serious lawsuits.

        Grand Total: Strip out the goodwill and it's pretty much -0-. There's your "intrinsic value."

 
RICK
10.22-0.03(-0.29%)May 2 4:00 PMEDT