1) Roark Capital, Sentinel Capital Partners, Wingstop, MOD Pizza, Pieology, Blaze Pizza - All have a reason to be interested and all have easy access to the currency necessary to do the deal.
2) RAVE's CEO and CFO completely off the grid the last few weeks. I have personally tried to reach them through phone calls to their offices, their personal assistant,, email, and even twitter. I have confirmed with other large shareholders that they have had the same experience over the last 2-3 weeks.
3) RAVE stock is trading at multi year lows and the insider buying window was open while the stock was trading at $3.50 but there were no buyers despite the significant buys at much higher prices in other recent open windows. Could it be that insiders were restricted these last few weeks due to merger talks?
4) The space is ripe for consolidation. There are rapidly growing players on one end with valuations exceeding $100m who have great access to capital like, MOD Pizza through Perella Weinberg and Blaze through Lebron James and other high profile financiers of their growth and likely even Pieology/Panda Express, whose charismatic leader Carl Chang appears to be taking an early lead as the catalyst who will bring about this consolidation. RAVE offers two pizza chains for less than half the cost of one of these. At its current $40m market cap, you get a 100 unit Fast Casual Pizza chain (about the size of Pieology before its acquisition of Project Pie) and you get a 200 unit pizza buffet chain. $40m is about 1/3 the valuation of MOD Pizza and Blaze.
5) Carl Chang is on a roll - The founder and CEO of Pieology said last week after buying Project Pie that "we have both the experience and the strategic and financial support to begin merging the category in a calculated manner" and "The Project Pie purchase provides us with an opportunity to strategically accelerate our growth and we’re proud to make this first big move of hopefully many to come.” With
Sentiment: Strong Buy
Four openings scheduled for July, Pie Five continues to grow rapidly. Number of Pie Five restaurants has more than doubled since the stock was at $15.
Pie Five is easily worth 2x Rave's market cap. No way that the other players in the fast casual space are not circling with the stock this low and also the fast casual players generally who might want to grab a foothold in the pizza space
Pieology acquired Project Pie yesterday and the comments made by Pieology management and investors made it clear that Pieology intends to acquire other players in the space too. I have assumed that Blaze or MOD would be the first to file for an IPO, but I think we now have to include Pieology in that race, as they could be much more aggressive acquiror with a publicly traded deal currency.
I am no longer bullish. When they did not file within the 15 days I liquidated my position. I will be surprised if there are good numbers from Longaberger in Q1 and I am freaked out that it is June 23rd and we are still waiting to find out how the company did in Oct - December of last year.
Pie Five's crust is already better than Blaze, Pizza Rev and Uncle Maddios and much, much more consistent. The others rely on employees to manually remove the pizzas when they are done and this causes inconsistent results. Sometimes its more than a "nice" charring - I saw two customers get theirs completely burned while I was in Blaze Pizza in LA a few months ago and it was because the guy who was supposed to be taking them out of the oven kept chatting it up with another guy back there. Pie Five's crust tastes better anyway though. Blaze has nothing that can touch Pie Five's thick crust.
MOD pizza may launch its IPO sooner rather than later to float their currency so they can buy RAVE before one of the other big fast casual players takes it down. With Buffalo Wild Wings and Panda Express buying in to smaller fast casual pizza competitors, you know that someone has to be taking a hard look at buying Rave at these prices. Would not be surprised to learn that some part of that short interest belongs to someone who ultimately wants to buy the whole thing.
Lets see if Gier moves on this. ELIO has proven that a Reg A+ offering can work like intended. All of the "believeers" in the concept who bought in at the IPO have are sitting with 100% gains and at times could have sold for more than that. It costs them almost nothing to solicit interest and I think they would see a real pop in the shares when it starts trading if they price it such that Pie Five is worth much less than $100 million. This $40 million market cap is ridiculous.
I have tried Blaze and Pizza Rev and I like the crust better at Pie Five. The thick crust at Pie Five is fantastic, neither Blaze or Pizza Rev can touch it. Pie Five is better than the others as leftovers that are warmed after getting cold too.
A quarterly conference call to discuss results and forward plans would do wonders. When the stock is falling through the floor, it is a no confidence vote for this management team and our CEO needs to step up to the mic and explain. Where are we going and how will we get there? The RAVE website needs work too. Try sending an email to the address it gives for investors. It doesn't work. Try calling the number. There is no way to reach anyone there and that kind of goes with the "I don't have to answer to shareholders" mentality that seemingly goes with the non conference call approach.
You addressed both of the key question marks here. Need to see improvement on both fronts, but I think those factors are the only reason why we can buy Pie Five and Pizza Inn at at a $40m market cap.
You are welcome Bo. I was adding shares here and there until yesterday, when I started adding in a big way. Someone was selling in a big way, because I added close to 20k shares yesterday. Someone dumped another 2500 at $4.10 after the close, so the selling may not be done. But I am very happy to be buying at this level.
Hey Bo. Good thought re: novelty as I have seen that too. Should not have too big of an impact on P5 SSS though, because they require a store to be open 18 months to avoid that result. I think you are right, this one is on sale though it may remain on sale through the current quarter. This is a great opportunity to load up.