why wouldn't you sell your shares in BAGL at the acquisition price? This deal is going to happen and the company will go private. You don't really have a practical choice to hold them past the closing date of the deal.
agree....I highly doubt they will be able to drive traffic hence the incredible challenge they have just getting this thing to breakeven.
agreed....and even if the comps improve, their cost structure at the store level is terrible. Many people focus on G&A but when you look at their historical gross margin, it's really bad. Unless they can (1) raise prices, (2) increase traffic and (3) reduce store costs including COGS, this is a melting ice cube.
as bigshot4par notes, this would be negative rounding error for Yum. Can you imagine the execs sitting around talking about Cosi....a concept that has NEVER made a dime and is a complete disaster at this point. Not gonna happen. I always love reading how folks will post that some big restaurant company should buy Cosi. There is no logical reason any of those larger companies would buy Cosi when there are many other solid concepts to acquire.
Why would someone the size of McD buy something as broken, and small, as Cosi? It would be rounding error to McD and not worth their time. McD doesn't need a new concept; they need to find ways to increase the same-store sales of their existing store base...that's what will drive their overall economics.
why would Chipotle want to buy Cosi? The Chipotle model is doing well on its own and they don't need another concept to add to the mix. Plus, I can't fathom why they'd pick Cosi even if they decided to add another concept to their offerings. There are plenty of other concepts out there that have more promise...and better economics...than Cosi.
The issue is that the company stores don't make money. Not sure why switching to a franchisee will all of a sudden make that store profitable. Plus, franchisees are only going to pay a royalty of, what...5-7%. Store counts have suffered both on the company and franchise side. Simply hoping to offload company stores to some franchisee isn't going to make sales go up or gross margins to get in line. The current margins are so bad that I don't see how a franchisee can take over a company store AND pay a 5-7 pt royalty. I'm not someone who has an ax to grind nor do I wish them ill will. I'm simply reviewing the financials and coming up with my conclusion.
I'm not sure I understand why some folks believe this is worth $2+. Losses continue....negative comps continue....operating losses are 22% of revenue (so, it's not like they are even close to breaking even at EBITDA line)...and cash continues to burn. Sure, they raised $7.5MM via debt offering but the quarter end cash was $6MM so without that, they would be out of cash. They are burning cash at a $3MM+ rate per quarter so I believe they have 2 quarters to stem/stop the bleeding. If not, they'll be out of cash...again.
why do you think it will go to $3? That would be a crazy valuation plus they just gave the right to a large investor to buy it at $1.15.
I'm not a supporter of this company however all the financial statements are shown in the full SEC filing. Just go to sec.gov and look for PBPB's filings and you'll see it. I don't think they're hiding anything. I do think the concept is flawed and will continue to struggle.
I love when people see a stock fall a ton (like this one did) and cry "it's oversold"!. Really? Just because something has gone down in price doesn't mean it's oversold. Right now, their forward P/E is 46 and their PEG ratio is 2.68 (according to Yahoo finance). That doesn't sound like a cheap stock to me. This concept is going to struggle to break through.
So...Yahoo Finance gives a range of 8/11-15 for an estimated date for when Cosi will announce their quarterly results. Well, today is 8/11 and we don't have a press release. Makes you wonder "what is taking so long?". Unlike many other businesses, the accounting for restaurants is relatively straightforward...it's a "cash" business on the revenue side (either cash or credit but no long term contracts to sift through) and the expenses are basically labor and food...and lots of overheard. Why does it take so long for them to close a quarter? I suspect the news won't be good based on their history.
spoiler alert....stop reading 'cuz it's been ugly for a very long time. Agree with your assessment.
On what metric, other than simply their share price, do you think they're cheap? When you look at all the classic valuation metrics, this is not cheap.
since they haven't announced any number recently, the folks buying the stock (unless they are trading on inside information) are merely speculating. Buyers can't possible know what their sales were this week or what their margins were.
Why would it be in Au Bon Pain's best interest to buy Cosi? If they thought it was a good idea, they would have done it by now. Heck, if ANYONE thought it was a good idea, they would have bought it for now. The market cap is so low that almost anyone CAN buy it.....but nobody has stepped up. Why? Because it's a very flawed concept, has never made a penny, is burning cash at a high rate, has NO owned real estate.....so...where do people think the value is? Just because it's a low price stock doesn't mean it's a value play.