I agree with rpt, the drop in price should not be real surprising. The restaurant opened, got alot of press, and the stock ran on big volume. Since then the volume and the press has dried up, and the stock is drifting down. People associate downward movement with "something must be wrong" and get nervous. I had a number of friends call and ask if they should sell this "before it goes back to $0.50" (I suggested that they hold on). The low volume can't support the selling and the stock drops - which scares more people, causing more selling. At some point you find a bottom and support. It's hard to say where this is - the chart people may have a better idea. All the while we're all getting scared s**tless.
Should we be scared S**tless? Probably not. Short term it's terribly painful and causes alot of anxiety. I don't know about you, but when this happens I always question my judgement. "Did I misjudge this?" "What if they don't open another restaurant?" "What if they don't sell any franchises?" "Oh no, I'm going to give back all the money I made and I'm not going to be f**king rich after all!" "How could I not have seen this coming?" "How come I didn't sell everything at $2.60?" "Why did I buy that Mercedes using a credit card?" "Oh no!!"
Somewhat irrational, but understandable.
So, what do we absolutely know for sure?
The place is busy. Every week a new revenue record. Every week long lines on weekends. Every week the slow days get a little busier. Every week we read about someone who went there and had a great time.
We know that Nolan has done this many, many times before. Atari, Chuck E' Cheese, Etak, etc.
We know the restaurant franchises like Fridays, Applebey, Bennigans, etc. are getting a little tired and we don't eat there much anymore. (I rarely, if ever go to a chain restaurant. Why go? The food is only OK and the atmosphere offers nothing interesting or exciting).
We know that uWink offers something more. Something cool - a social place where you can go eat good food, have fun and maybe meet new people. So we know uWink is a fabulous concept that they are making work. We also know, that if there was a uWink in your town, you'd be hanging out there! I know I would be.
We know that while uWink is unique, it's not going to cost as much to open and run as some of the other concept restuarants like Dave and Busters or Gameworks. What does it cost to initially buy all the games at Dave and Busters? Many hundreds of thousands. What does it cost to replace and update the games every year? Likely hundreds of thousands of dollars. We know that uWink does not require that kind of financial investment. Up front costs will be way less than D&Bs and uWink only needs to provide regular software updates, not expensive hardware like the others.
Once the financial and the franchise people discover what we "know" we'll see things happen. The franchises will start selling and the company will start opening more stores.
Which brings up one more thing we all know. Franchise sales and new store openings will move the stock up up up. Up to a point where this will be distant memory.
Pretty simple math if you ask me (not fuzzy at all)!
scandalls
