I thought about that, too. And you're right -- Parsi is really the only one who is 100% tied to Giggles' success.
My feeling is that as long as they aren't detracting from Giggles, there's no harm if this is just a side hustle. Ultimately as CEO, the responsibility falls squarely on the CEO -- and this is why I have been so critical of him, and his past judgement as being indicative of his future decision-making and ability to run a public company.
There is absolutely no doubt in my mind that the business can be successful. The customer demand is apparent, and can work in nearly any major urban market (where incomes tend to shift more toward the affluent who can afford the higher cost of organic food, etc).
The ONLY issue right now is cash. We're going to be diluted, folks. It's inevitable. Question is how much will we be diluted? 50%? 100%
I'm doing all of my future valuations based on the assumption that we get diluted to 25% of max AS, or around 300M OS. At the current PPS of .05, the "cost" to issue 170M shares would only bring in $8.5M.
If we go with Giggles estimate that each location will require around $600k out of pocket, with the other $600k being paid by the mall owners (per the April 2017 presentation), Giggles could in theory open 12-15 new locations.
If there are 15 locations each doing 300k net profit, that's $4.5M/year net earnings.
$4.5M/300M shares = .015 EPS. Assign a 10x multiple and the share price would be around .15/share.
Not too great.
This is why it is IMPERATIVE that Parsi figure out a way to raise money in a non-dilutive way. The fact he didn't capitalize on what he claims to be insane demand for his business when the stock was trading in the .15-.20 range speaks volumes to his ineptitude.
There is a reason why community colleges typically do not produce top-tier corporate CEOs. Parsi glamorizes his "Wall Street" background but if you dig a little you'll see he was a glorified stock broker. Stock brokers are essentially salesmen; they make money by pitching their services to clients. And Parsi is a great pitchman. But he has absolutely zero business acumen. And that's going to be the anchor that tethers Giggles to pennies for months and years to come.
