Bad publicity is better than no publicity at all. If this was a pump and dump move the stock would have fallen back under $10. The shorts are coming back. Bark and Blue aren't the only wallflowers anymore. Unfortunately ao 9-1 they were all underwater. I'm guessing we might be as high as 100k by now. But they scare easy and it appears the current longs don't.
My guess is they may just settle this NYC thing - hopefully by the end of the month for a couple of Mill. Otherwise Rick will drag this out for several more years. I highly doubt the ex strippers nor the lawyers want to wait that long for a payout if a payout were to come at all. Anyone know what was the payout for the MN clubs by the way - was not much.
Next big news coming will be NYC real estate deal, guidance for next year by Rick by EOM, Opening of the new club, and actual Q3 sales.
The next 6 weeks are going to pretty interesting. And does anyone know how the CA club is doing?
This lawsuit goes one of two ways, either they settle soon......because with the summary judgment in place, the trial won't go very well for them. Or they aggressively fight the summary judgment.....but that is an uphill battle. Too win, they would basically have to get the FLSA thrown out (doubt this will happen) or completely change there arguments. I do believe that the strip club industry is far better off under the independent contractor model, but with the way FLSA is laid out.....it won't fly. From the way the summary judgment reads, and most labor lawyers stand, the independent contract model is improper for most. Under the interpretation given in the summary judgment.....Ricks has a dress code (aka control), a larger financial risk, doesn't require previous experience and Ricks needs strippers to be a strip club. The only thing does go in Ricks favor is that strippers duration is usually pretty short.
Successful strippers are being penalized by those who shouldn't be in the business, but because they were ICs.....Ricks has no incentive to terminate them for being unprofitable. Strippers who, if they had half a brain, should have moved on to greener pastures, stuck around making less than minimum wage (apparently one girl didn't break minimum wage for 39 weeks). Ricks will never convince anyone they don't have control.....so they will have to focus on financial risk and skill set. In the ruling, it was pointed out that 60% of strippers danced less than 20 days. Ricks could probably point to this to refute the claim that strippers don't require skill......if it was so easy, why don't more succeed? Why is turnover so great? Which could also go towards financial risk.....Ricks could point out that time is an asset being risked by the strippers. With the high turnover, her chances of success are low.....her time might be better used at a different job. On strippers being integral to Ricks, clearly, Ricks doesn't need strippers who can't earn $100 a night!
My opinion exactly about the NYC case. This issue will get settled before it goes into court. This settlement will be a buying opportunity., when it occurs. My guess is that a sell off will occur. What a great buying opportunity ? It will be like last years DUI case , which caused the 52 week low.
Far more reasons to be long than short. One NY clears up,, all that is left is the pole tax. . The statue of limitations is running out on that issue for some of the back years (according to Eric, at the presentation). My guess is this case will get settled soon. Eric mention 2-6 years at least. Texas doesn't want the clubs, they want the tax dollars The state will settle for next to nothing.
bruinsfan-are you adding to your position here ? I think, that we get a pullback to the 10's. I admit, unlike shorting_ricks, that I was wrong at 9.25. I have been adding money to my account for this drop.
Statute of limitation is not running out on the Pole Tax collection, because the time while it's being argued in court doesn't count under the Texas Admin. Code:
"Sec. 111.207. TOLLING OF LIMITATION PERIOD. (a) In determining the expiration date for a period when a tax imposed by this title may be assessed, collected, or refunded, the following periods are not considered:
(1) the period following the date of a tax payment made under protest, but only if a lawsuit is timely filed in accordance with Chapter 112;
(2) the period during which a judicial proceeding is pending in a court of competent jurisdiction to determine the amount of the tax due;"
If they settle, this suit will settle for less than $10M.....maybe $5M is still on the table? That is less than two years of profit from the NYC club. I wouldn't expect much of a drop on the settlement, since closure would be a positive. On the flip side, settling would just bring out more lawsuits. If it was just one case, it would probably be in Ricks interest to settle. But longer term, Ricks is probably better off putting up a strong defense of the IC model if they wish to keep using it. Other clubs will be sued, there are too many lawyers looking for a quick buck not to look for more unprofitable or retired strippers wanting some extra cash. If they settle, they better convert to the employee model everywhere or we will be settling every year with another group. Case law goes against Ricks at the moment, but that could be largely a result of nobody willing to spend the money to fight it. Clearly in NYC, Ricks would have been better off settling from day one for $5M than 4 years of legal fees which is probably already greater than that amount.
Maybe one day, someone can explain to me why can't people just pursue a career or job they like, instead of supposedly feeling they are entitled to work for a specific company under the terms that work best for them? If you didn't like the IC model, don't be a stripper at Ricks!
can you imagine what the idiot feels like that predicted ricks below 6? Had to change his screen name... How about the idiot that predicted below $8.50 by friday? LOL Well, we all hit a lick and he is still puking....