Replies to post #5770 on uWink Inc. (UWKI)

[Jews4Kapler]

Well I think there MAY be some validity to the idea that uWink's weak balance sheet will make it vulnerable during discussions for selling franchises to area developers...any thoughts on that rawnoc? Zac

[TipJensen1]

Come on now, granted, my hastily calculated number was way wrong, but the simple fact remains that assuming a 40 multiple, current dilution, and stores that are 50% more profitable each than a comparable BWLD, we still need 75 stores up and running to justify a 5 dollar share price. If the full dilution you indicated comes to fruition, we need more like 150 stores up, running, and producing about 300K a year in net profit (after corporate overhead) just to get to 5.

That's a lot of outlets given there's only one in existence now.

Now, I know full well that this stock could pop to five on the announcement of franchises but eventually everything will come back to the fundamentals. How high of a multiple do people really think a cash-intensive business like a restaurant can garner? 50? 100? I mean, Google only trades at a 64.

Even if we give UWNK a 64 multiple like Google, they're still going to need nearly 100 profitable stores at RAWNOC's projected dilution to get to a share price of five dollars (assuming this stock starts to trade on actual earnings as opposed to potential). And that's assuming stores that are 50% more profitable than BWLD, one of the most profitable restaurants in the biz right now because Wings are so cheap at the moment and they make a disproportionate amount of money on booze.

So, that's my thesis and it's not based on the error at all. I made a stupid, late night mistake and I apologized for it. The fact that I did it is embarrassing and if anyone wants to think that that mistake makes me an idiot or that I know nothing about reading quarterly reports, valuing stocks, or comparing companies to their peers, please feel free to ignore everything I say and belittle me. Or keep harping on it as the reason to sling mud at my theories. But I really would like to see someone provide any sort of FUNDAMENTAL analysis that would actually support a stock price of five within the next year.

To give credit where credit is due, both Mohit and Puzzlecraft have made a few strong posts with some numbers in it recently. Kapler and Rawnoc pointed out my error which was good too.