That's nice, but there's just one problem. There are hardly any redone Wendy's out there. In fact, the company has plans for just 150 store remodels through the end of next year. Considering there exists nearly 6,000 Wendy's stores, the remodel rate is just 2.5%/year. In other words, it will take Wendy's around 40 years to get around to remodeling all of there stores. Conclusion: their store remodeling effort is a non-event. It creates some buzz and hype for uninformed investors to hang their hopes on. But there is very little actual progress being made on the ground.
Why is WEN borrowing $100 million for the purpose of remodeling stores, when two years ago they said they had enough cash to remodel stores? I'll tell you the answer: It's because they blew $100 million cash on stock buybacks instead of putting that cash toward remodeling stores, like they promised they would do. That's the answer. That's the truth.
Bunch of pretzel bun sheep running loose on Yahoo. Haha! We all know how this ends.
I'll be switching to another broker by the end of the year, but I wanted to get some blood money out of TD for all the pain they put me through by canceliing command center 2.0. I just received the following message from them in my inbox:
"...I have taken the courtesy to add 10 free trades to your account for the delay. Those are supposed to come from our marketing department and they have run into some problems getting those on. You should see those now active on the account and they do include the base commission for option trades."
Hmmm, I think they're going to need a bigger bribe.
This message was posted by RELM on their Facebook page yesterday:
"We are looking for press in Portland, Oregon who are interested in finding out why the city gave an $11.7 million order for land mobile radios to Motorola without any other bids. Overpaid by $6 million. Does anyone care?"
There's also the issue of user interactive capability with the radio stations. I think NextRadio is working on expanding the line-up of stations that are willing to adopt. Apparently some stations are taking a wait and see attitude. At any rate, managemnt could have done a better job differentiating themselves from the competition on last weeks presentation to investors.
Let's be honest. Before the pretzel bun fad saved Wendy's from the brink of disaster, this stock was in serious trouble. Management promised a national breakfast menu rollout which proved to be a total disaster. Then they promised to provide funding to franchisees so they could remodel their stores. Well, that never happened because management would rather spend their cash on stock buybacks to prop up the price of their options. The only stores being remodeled are mainly company-owned stores, which is just a fraction of the 5,000+ stores. And speaking of this ridiculous pretzel bun fad, are you guys aware that Wendy's management had introduced a new hamburger bun a couple years prior to the pretzel bun? It was called the buttery toasted bun. Yeah, and they pinned all their hopes on that bun to drive sales too, but it went down like a lead balloon. They even went on CNBC to hype their new butter bun, and made total fools of themselves. Even Joe Kernan was laughing. So anybody who thinks that management has a clue about what they are doing needs to examine the past, and realize that the current run in stock price is a one-off event due to the dumb luck of a pretzel fad that is hitting all restaurants at the same time. This will end, and end badly. Buyer beware.
Hello RP, good question. First movers/partners (like Sprint in this case) almost alwats negoitiate an exclusive rights agreement for a defined period. Remeebr, Sprint isn't merely a customer of NextRadio. They are partners! That's a big distinction.
At any rate, you can Google a press release from Sprint with the following headline:
"..Rock Out With New NextRadio App on Red Hot HTC One Exclusively from Sprint Beginning Aug. 16"
Notice the word "exclusively" in the headline.
Another quote from Fared Adib, senior vice president-Product Development, Sprint: “Marking another innovation milestone for Sprint, our partners at NextRadio are transforming the FM radio listening experience by allowing users to interact with their favorite radio shows by calling or messaging directly from their smartphone.”
Notice Adib refers to NextRadio as Sprint's "partner".
My interpretation is that NextRadio has exclusively partnered up with Sprint in order to facilitate the advent of FM-abled smartphones. I really don't see how Verizon or AT&T enter this equation until the Sprint contract expires. And rest assured, there is a signed contract.
From the first paragraph of the article:
"..Music lovers rejoice! Sprint signed an industry first and will offer access to the new NextRadio® interactive FM radio application beginning with HTC One® and HTC EVO® 4G LTE. This deal will allow Sprint to provide the NextRadio service on a broad range of Sprint smartphone devices during the next several years."
Note some key words: 1) Signed 2) Deal 3) several years.
"...Just today, the company gained $4.5m in market cap for a $1.3m order...which will likely net less than $200,000 of income."
So you think the upside pop wasn't justified based on the amount of the contract award. Let's use the same logic to see if the sell-off after June earnings was justified. The earnings report showed that EPS missed the analyst estimate by $.05 (i.e. .01 actual vs .06 estimate). The .05 differential is $680,000. Did the stock lose $680,000 in market cap when earnings were released? Let's see.
The stock closed at $3.65 prior to earnings. And opened at $2.77 after the earnings announcement. So the stock lost $12 million in market cap because of a $680k shortfall in earnings. Does that sound right to you? Because if it does, with all things being equal, then a $200k surprise upside to earnings would translate to an increase of $3.5 million in market cap. Which isn't far off from what happened this week.
As for the hedge fund manager who you say is manipulating this stock, he was just appointed to the board of directors. So he is no longer just an outside fund. He is technically an insider. It would be illegal for him to manipulate this stock.
"...if this hybrid radio/digital truly works and becomes a standard for every smartphone, EMMS will get the value it deserves."
You touched on a key point. Will NextRadio become standard in every smartphone? As of now, the answer is no because they have an exclusive contract with Sprint. And Sprint only commands 20% of the smartphones out there. I was looking for some color on the Sprint contract yesterday, but the guy was obviously trying to avoid the subject altogether. They didn't include the fact they even had a deal with Sprint in the slide presentation. What I'd like to know is how long the exclusivity lasts. Is it 3 years? 5 years? 10 years? 20 years? The answer to that question makes a BIG difference. And I'm disappointedf that the analysts asking questions yesterday didn't know enough to ask.
MCD had Chipotle and dumped it before building it out. Not sure what management was thinking. They had a nice upscale brand in their portfilio to complement their low end.
As for the mighty wings, I'm not a big wing fan myself. So maybe I'm not one to judge. I just tried it to compare to Popeye's.
You make some good points. We'll see how much higher this high-flyer can keep rising based strictly on the valuation of their assets. And if it's true that their revenue growth is pegged to consumer confidence and nothing else - no intrinsic catalysts on the horizon - no growth drivers - not even NextRadio - then I say good luck to us and keep praying for good macro numbers.
And you're right. Perhaps I don't belong here, as I try to avoid stocks that have quickly popped 100%, only to stagnate sideways for years with no additonal growth prospects. You're right though -- Buffett would have bought this stock. But he would have bought it at $1.50. Not $3.00. It is growth investors like me who buy this at $3.00. So be nice.
Thanks. That might explain it. I guess I should have followed the link in their email. No big deal. I'm probably going to switch brokers eventually. Frankly, I think their customer service is curt and rude. But losing command center was the last straw.
Have any of you former command center 2.0 users gotton 5 free trades yet for trying Trade Architect or TOS? They promised 5 commission-free trades for trying the new platforms. So far no credit has been given. Has anyone here received their 5 free trades like they promised? I'm just curious to know if they keep their word. Or if this is just another reason to switch brokers. Talk about a cheap come-on.
That's true, he made the case for being undervalued based on assets alone. There was a good slide that detailed the value of their FCC licesnses by state. It was very impressive.
I thought maybe this could turn out to be a growth stock also, but I think now that's being too optimistic. It's unclear even if NextRadio will imrpove revenue overall. Advertisers may be too entrenched in the current newspaper/internet paradigm. We don't know yet. The assumption they seem to be making is that advertiers will just automatically begin to shift from newspaper to radio once they see the potenetial of NextRadio. But let's wait and see the evidence for that first.
What are you saying? MCD will buy AFCE? That's a mighty stretch off a mighty wing.
By the way, has anybody tried the mighty wings at McDonald's? I did. There was so much grease I threw half of them away. And WAY too expensive. They cost over $1.00/wing. The 5-piece wing meal (w/fries and coke) was over $8.00, and it didn't even fill me up. Anybody who has a choice will choose Popeye's. Or even KFC.
Not much to say. Not much guidance regarding NextRadio. He only mentioned Sprint in passing. In fact, the word "Sprint" doesn't even appear on the slides. He goes on to say that growth is slowing down, and that last quarter's performance of +6% growth won't be repeated, and that we can expect growth in the LOW single digits. I guess that's better than negative growth, but nothing to rejoice about. I thought NextRadio was going to ramp growth upwards, but I guess I was wrong. I recall the headline from their previous earnings press release: "EMMIS Reports Acclerating Revenue Growth". That word, "accelerating", was misleading. It portrays a company that is in the midst of revenue growth at a rate exceeding prior rates of growth. But today's webcast indicates the opposite. The growth rate is slowing down compared to last quarter.
Also, I thought it was misleading that he mentioned today on the webcast, all the millions of people who have smartphones and how now they can listen to radio on their smartphones. But he didn't pare down that number to Sprint subscribers only; who would be the only users to have access to NextRadio. To put a number on this, Sprint has only 56 million customers. Whereas, Verizon and AT&T each have over 100 million customers. So NextRadio will only reach about 20% of the total cell phone market. It's still a decent chunk of the population, but not even close to full exposure. Not even close to half, or even one/third. This wasn't even mentioned in the slides. They made it appear like NextRadio will be available to smartphone users in general. Not so.
I emailed them with a question: why haven't I recieved the 5 commission-free trades yet for trying TA or TOS? This was their response:
"...Good day. For the first 5 trades placed on a new platform, you will see a credit post to your account within 2 weeks of the trade date."
This is a lie. I traded using the garbage Think or Swim platform back in late August, and I still haven't received any credit for the trades I made. Has anyone actually received a commission credit for trying the new platforms, or is this just a come on? I'm curious.
The bid was thin and someone got spooked/manipulated. $.185 is higher than the $.13 print on 8/29 (see my post that day for details).