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American Superconductor Corporation Message Board

oraclealex 55 posts  |  Last Activity: Mar 28, 2014 9:59 PM Member since: Oct 13, 2009
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  • oraclealex oraclealex Mar 28, 2014 9:59 PM Flag

    In the press release they say they will make fuller use of the building. That and the fact the build out will happen without shutting down Club O during the process. Also, Miami club is 74,000 sqft. These three things led me to believe they would use the whole building, but going back and reading it, that is actually an assumption on my part, not fact. They very well might not use the whole building, but I strongly believe they will.

    The ultimate problem with Vegas was the lease terms were way to high for anything but a a club executing perfectly. They would eventually had to pay $2m plus a year in rent, while only breaking even at $1.2m a year rent. Owning the building gives them a lot more room to be successful, even if it isn't perfect.

    They will at some point give us some of the financials for Club O, but not until after they close. No point in creating a competing bid for the target. In the event of Jags, the clubs did about $15M in revs before Rick's closed. In 2013, Jags clubs did $18.5m in revs. You can find revs and income numbers on previous acqs by year in the Growth section of the Management's Discussion and Analysis of Financial Conditions in the past couple years of 10Ks. They have a decent track record of being able to improve clubs they acquire.

  • oraclealex oraclealex Mar 27, 2014 10:39 PM Flag

    I don't know what it would cost to build the Vegas club.....but I do know another Houston based strip club did buy the building for about $10.6M. Rick's had an option to purchase the building for $23M. I don't think the building is the major part of the price in most club purchases. It is licenses, current business and location, and in many cases......you can't start from scratch. In the case of Chicago, the majority of the price is related to the actual business and not the building. Club O has full nude, full liquor license (like Tootsie's Miami)......which seems to be rare. It must do a decent amount of business if they think quadrupling the floor space is wise.

    On the other side, a new coat of paint and some cheap facade changes can completely change the image of a building. What the Chicago location looks like now doesn't necessarily mean it won't be changed. I have seen many clubs that look pretty bad on the outside, and are always packed on the inside. I wondered if it is an issue like NYC where they can't close for too long without losing the license, or just the owner is making a consistent profit, why mess with it? For the most part, people can't tell when they go......it is dark, just like inside the club.....the lighting hides the imperfections. Seems to be the theme of the industry!

  • oraclealex oraclealex Mar 26, 2014 7:40 PM Flag

    It isn't like the original Tootsie's is located in downtown Miami, either. It is located near major freeways and warehouses. Looks to be an old abandon grocery store. Probably the nicest looking club I have seen was Rick's Vegas, but we all know how that turned out.

  • oraclealex oraclealex Mar 26, 2014 8:12 AM Flag

    I really don't see how food court companies related to Rick's? Much less old casual dining places that nobody has gone to for the past decade.......nobody every responds to the questions, "Where do you want to eat tonight?" with "Oh, Ruby Tuesday or Red Lobster would be great!"

  • Reply to

    2010 Cessna Citation Mustang?

    by barkingdog78 Mar 18, 2014 7:45 PM
    oraclealex oraclealex Mar 19, 2014 7:45 PM Flag

    When you said 2013, I figured you meant the TTx. There really isn't any documentation of what year the $4.3M plane is (FAA registration doesn't have it listed)......but they took delivery in Feb. 2014.

    The question about plane turnover really depends on how well the old one holds its value......if it makes sense. Clearly, newer plane is faster, a slightly greater range and another seat. Not to mention, the old plane would be over 50% depreciated by now, so they start that clock over again. They also don't have to worry about any major maintenance expenses (though they had a couple 1000 hours to go before that would be an issue).

    It all depends on what they can sell the old plane for if it makes sense. Maybe we will get really lucky, and he will pay himself $1 and issue a dividend to pay himself, and everyone else!

  • oraclealex oraclealex Mar 18, 2014 10:53 PM Flag

    I think they probably mean an accounting gain.....but who knows, we find out in two months. Is it not possible for a bidding war on a barely used plane? It happens with exotic cars all the time, a used Ferrari goes for more than new......because of the waiting list issues vs the impatience of rich guys. Sounds like Rick's only took delivery because they had put a large down payment to secure a spot on a waiting list.

  • Reply to

    2010 Cessna Citation Mustang?

    by barkingdog78 Mar 18, 2014 7:45 PM
    oraclealex oraclealex Mar 18, 2014 10:47 PM Flag

    Ummm, they didn't? Much less the Citation Mustang is the 2012 plane, and is a completely different type of plane. That is kind of like comparing a Honda Civic coupe to a SUV! One is good for single driver, the other is good for the whole family.

    Ya, the Citation Mustang is definitely a 2012 plane! Though the 2010 plane I think is still listed as for sale......so maybe they meant both?

  • oraclealex oraclealex Mar 17, 2014 7:25 AM Flag

    I think that misses the point in starting the REIT. Granted, it starts out being 100% Rick's real estate, but in time......it creates a funding vehicle to other adult clubs/businesses that apparently can't get loans from banks and such forth. Other club's owners would be very hesitant to sell real estate to RIck's since they are also a competitor, while a separate entity would not have that conflict. Rick's would have an incentive to raise rates, just as any other land owner knowing they can't transfer the license. As a REIT that doesn't manage clubs, without the owner the REIT risks losing the license. Down the road, the REIT becomes a greater percentage of other clubs.....the 9.9% investment brings in additional funds from third party real estate. If the REIT is 100% Rick's 10 years down the road, then the REIT was a horrible idea long term.

  • oraclealex oraclealex Mar 15, 2014 1:59 PM Flag

    I don't doubt that Sony and Columbia have a very good understanding of trademark law, being that is clearly where they probably spend most of there legal dollars. As I stated before, Rick's would probably settle and not drag it out. Unlike NYC labor case, defending a minor component of the concept in one restaurant doesn't gain them much. In the event of NYC, how entertainers are paid has major consequences on future operations and pass liabilities.

    Though I imagine they will attempt to get the case dropped initially, you must imagine Sony and Columbia file many complaints throughout the years as bluffs, and hope the lack of financial resources of smaller businesses will fold under the threat of lawsuit. Though I guess a simple cease and desist letter might be enough for that, too. If getting the case dropped fails, then just repaint a few things and settle.

    It seems like from reading the complaint, they seem to take offense to the fact it is a breastrant concept. I do wonder if they have had an uptick in DVD sales in the area though, I for one completely forgot about the movie until you brought up the issue in the past. It was pretty dumb movie in my opinion, and it seems Will Ferrell fame has faded since then.....so not sure they actually negatively affected the Sony/Columbia's IP. Though I would guess the fact it is a breastrant (ran by a strip club operator) might hinder any potential licensing agreements.

  • oraclealex oraclealex Mar 14, 2014 9:03 AM Flag

    Well, there are several restaurants that go by "Ricky Bobby" across the US. Then there is the parody issue.....this could all be just another Mattel v. MCA Records issue all over again. Did you think Vivid Pirates was Pirates of the Caribbean?

  • oraclealex oraclealex Mar 13, 2014 7:42 PM Flag

    I highly doubt they will spend much time fighting it out in court.....very little to gain from doing so. Most likely they just settle, either they cut a deal with the studios or they rebrand. The studios won't gain much by winning a protracted legal fight.

  • oraclealex oraclealex Mar 13, 2014 2:59 PM Flag

    I guess they don't consider it material, hahaha. Numerous restaurants use the name Ricky Bobby across the country. But maybe the lawsuit was what they wanted, a no name restaurant with a racing theme that they wish to expand across the US. Columbia and Sony suing them does give them free marketing, and in the end they can rebrand the entire place with a few buckets of paint. Most of the terms are pretty vague and widely used that they cite. Most likely they settle the whole thing if it doesn't get tossed.....since the possible financial reward isn't great for the studios.

  • Reply to

    Need a new Jet

    by heisenberg_blue Feb 27, 2014 12:29 PM
    oraclealex oraclealex Feb 28, 2014 1:23 AM Flag

    Yes, it is called the jet stream......but I also said they wouldn't be able to make it back in one flight. The jet stream creates a tail wind when moving east and would improve the planes range. The Cessna site assumes no wind when showing the range of the planes.

  • Reply to

    Need a new Jet

    by heisenberg_blue Feb 27, 2014 12:29 PM
    oraclealex oraclealex Feb 27, 2014 11:46 PM Flag

    No kidding.....learn to read. I believe the line that I state the FAA wouldn't allow them to fly with out having enough reserve fuel for 100 nm says that they can't glide into airports. But Rick's doesn't fly into LaGuardia or Newark either, it is much cheaper to fly into a local airport. And there is something called the jet stream.....so if they fly from Houston to NYC, the jet stream would help them out, and increase their easterly range. Or they could just hop through other cities, like Miami, Indianapolis, Philadelphia or Minneapolis and visit other clubs or acquisition targets. The range is also dependent on weight, Cessna's website assumes 200 lbs a person......so maybe they are less? And it takes 24 min to reach max altitude.

    I don't think they have a CJ1+, but a M2. Cessna website list the CJ1+ as a legacy plane and the M2 is the next generation that went into production in 2012. Since they paid $4.2M and the serial number 0810, the plane is probably brand new.

  • Reply to

    Need a new Jet

    by heisenberg_blue Feb 27, 2014 12:29 PM
    oraclealex oraclealex Feb 27, 2014 2:11 PM Flag

    The range calculations that Cessna gives include a 100 nm of excess fuel so a plane can ditch a landing and make it to another airport. I would imagine FAA won't allow a flight plane that doesn't incorporate having enough fuel at the end in reserve incase something like that happens, too. The plane would actually make it there, but wouldn't be able to make it back without refueling somewhere because of the jet stream effects. They can easily hit multiple clubs on any trip, so they may never attempt to fly directly from Houston to New York (more likely New Jersy is where they land). The flight hours on the old plane average 2 hours a flight, so they aren't making a lot of direct flights to NYC anyways.

  • Reply to

    Now my Fannie is up 50% already

    by heisenberg_blue Feb 26, 2014 3:45 PM
    oraclealex oraclealex Feb 27, 2014 9:41 AM Flag

    I didn't lie......there is a strong chance that the prefers will do better than the common, since they get priority. I don't disagree that both Fannie and Freddie are worth a lot (clearly any company pulling in a several billion dollar profit each quarter is very valuable), but it is all going to come down to the courts figuring out who has the rights to that profit. The Treasury has held the position that the equity is worthless and they supercede previous equity holders. We will see how it pans out in the next couple years.

  • oraclealex oraclealex Feb 26, 2014 11:11 PM Flag

    Well, something like 30% of those intangibles and goodwill is related to Tootsies alone. Rick's paid $25M for the club and it has grown significantly since then......it probably could fetch 30% to 40% of the company's value these days alone. And no real estate is even tied to it! The real estate covers the outstanding debt and plus some (not to mention a lot of the Dallas real estate is held at historical value, and probably worth a fair amount more today). The 40 plus other locations are functioning businesses and could probably average over a $1 million a location easily.

  • Reply to

    Now my Fannie is up 50% already

    by heisenberg_blue Feb 26, 2014 3:45 PM
    oraclealex oraclealex Feb 26, 2014 11:01 PM Flag

    Well, unlike Rick's.....one bad ruling for FNMA will definitely kill that stock. Even wins for the hedge funds suing the government could be bad for you, since they hold prefers and may in the end not seek wipe out the common stock. Until then, FNMA is a very active stock.....hopefully you get out at the right time. It is very likely to swing up and down 50% from week to week.

  • oraclealex oraclealex Feb 25, 2014 10:10 PM Flag

    The year isn't over yet!

  • oraclealex oraclealex Feb 23, 2014 11:39 PM Flag

    While I think Rick's could definitely do well if they built there own club on the strip or a block off of it for the right price. I don't think the land would be too affordable. Sapphires which owns a property that is just 50% larger than Rick's Vegas location, was valued at $38M in 2006 based on prices paid for a 40% to 50% interest in the property. Rick's had an option for their location at $23M. It was sold in 2012 for $10M (interesting, to the owners of the largest Houston strip club). Even in 2009, to buy a lot closer to the strip, I got to think it would have cost $10M plus, and probably still does today. There are no clubs on the strip either, I think Industrial Rd is the closest one can get, but that is significantly more convenient than the old Rick's. You had to crossover I-15 and tourist wasn't stumbling across it by accident. The Hustler's club that is losing money is located on the south end of the strip on the other side of I-15 as you approach from LA. It is pretty far out of the way, too.

    I don't think Rick's would put $10M down on a lot or building and then start trying to develop a business. Especially in Vegas where they still struggling to return to the mid 2000 glory (and Rick's is already levered up, locking up $20M on location they already lost $30M in and not generating cash for a year or two off that might be too much currently). These days, Vegas has lost its luster as a destination. It has gone back to a regional destination and not an international destination. People have a lot more options for casinos these days than Vegas.

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