Author Topic: RICK - RCI Hospitality  (Read 28515 times)

Foreign Tuffett

  • Hero Member
  • *****
  • Posts: 1385
Re: RICK - RCI Hospitality
« Reply #70 on: February 12, 2020, 04:49:57 PM »
https://seekingalpha.com/news/3540323-rci-hospitalityplus-6_6-after-10m-buyback-boost

This just got interesting again. Especially with the size of the Q1 activity, these guys could do some damage. Buybacks are the only way for companies with limited followings, no obvious go private partner, and significant perceived valuation discounts to do anything about it.

How are you factoring in managment's indefensible past capital allocation? Did anyone ever figure out who was living in the three Houston single family houses they owned? I wonder if management still has a corporate jet fetish?


...owning residential houses, private plane fetish, etc?
Former Teldar Paper Vice President


Gregmal

  • Hero Member
  • *****
  • Posts: 5158
Re: RICK - RCI Hospitality
« Reply #71 on: February 13, 2020, 05:00:07 AM »
https://seekingalpha.com/news/3540323-rci-hospitalityplus-6_6-after-10m-buyback-boost

This just got interesting again. Especially with the size of the Q1 activity, these guys could do some damage. Buybacks are the only way for companies with limited followings, no obvious go private partner, and significant perceived valuation discounts to do anything about it.

How are you factoring in managment's indefensible past capital allocation? Did anyone ever figure out who was living in the three Houston single family houses they owned? I wonder if management still has a corporate jet fetish?


...owning residential houses, private plane fetish, etc?

There's not really going to be a way to get rid of those things, or at least one should assume. However I do think there's been a better effort with respect to capital allocation the past few years, which has a lot to do with the improved share price. That said, "better" here, is like comparing a 10 year old car with a 12 year...obviously not ideal but the hand thats dealt. I mean they still cant even get their financials out on time. Something that probably bothers newer investors, but something that anyone who's followed RCI over the years just looks at and goes "that's RICK".

All the said its not like this is trading at 25x...its trades where it does for a reason. But the business does spit off enough cash that should they continue to be serious about buybacks, its impossible not to have it translate to the share price. Probably just as much, if not more so a math trade as it is a fundamental one.

johnny

  • Hero Member
  • *****
  • Posts: 549
Re: RICK - RCI Hospitality
« Reply #72 on: March 13, 2020, 09:49:07 AM »
coronavirus wouldn't rank in the top ten of my epidemiological concerns here, but im happy to see this totally overrated thing beat down a bit

Nell-e

  • Full Member
  • ***
  • Posts: 121
Re: RICK - RCI Hospitality
« Reply #73 on: March 13, 2020, 10:00:01 AM »
coronavirus wouldn't rank in the top ten of my epidemiological concerns here, but im happy to see this totally overrated thing beat down a bit

Isn't the entire business model about groping women and stuffing dollar bills in bikinis?  With COVID19, people are being asked to socially distance themselves.  I would imagine this to be extremely disruptive to business.

And if they stay open, what's the legal liability if an employee contracts the virus?





johnny

  • Hero Member
  • *****
  • Posts: 549
Re: RICK - RCI Hospitality
« Reply #74 on: March 13, 2020, 10:27:21 AM »
I'm just saying that more people die of herpes encephalitis than coronavirus-contracted-from-US-strip-clubs, bro.

longterminvestor

  • Jr. Member
  • **
  • Posts: 72
Re: RICK - RCI Hospitality
« Reply #75 on: March 13, 2020, 10:42:03 AM »
Complicated answer on multiple fronts.  Specifically for RICK's the overwhelming majority of "entertainers" would be defined as "independent contractors" ergo not defined as employees and would not be eligible for benefits under standard workers compensation policy.  With regard to a "client" suing RICKS for contracting disease in the establishment, I would bet heavy money their General Liability policy has a "communicable disease exclusion" therefor no coverage. 

On a macro level, Workers Compensation benefits are regulated by state individually.  Each state will issue their own orders on how to handle employees contracting COVID-19 disease in work place.  Argument for not paying claim, outbreak is widespread and is contractible in ordinary course of life.  That could be political suicide for insurance companies and maybe easier just to pay claims and be done with it.  Some states have already issued orders for insurance carriers to pay work comp claims for hospital/healthcare employees contracting disease in course of work. 


Nell-e

  • Full Member
  • ***
  • Posts: 121
Re: RICK - RCI Hospitality
« Reply #76 on: March 13, 2020, 10:48:25 AM »
I'm just saying that more people die of herpes encephalitis than coronavirus-contracted-from-US-strip-clubs, bro.

I'm just saying it's perception that matters and COV19 will drive away more customers than herpes encephalitis.


johnny

  • Hero Member
  • *****
  • Posts: 549
Re: RICK - RCI Hospitality
« Reply #77 on: March 13, 2020, 11:05:42 AM »
I'm kidding dude, I'm a long time hater on this company and I just bumped the thread to have some fun. I cannot believe that some of the people here were buying this thing at 10x peak earnings with all of the serious ethical/moral/legal problems both inherent in the business model and specific to the personalities at the top.

Foreign Tuffett

  • Hero Member
  • *****
  • Posts: 1385
Re: RICK - RCI Hospitality
« Reply #78 on: March 13, 2020, 05:20:13 PM »
I'm kidding dude, I'm a long time hater on this company and I just bumped the thread to have some fun. I cannot believe that some of the people here were buying this thing at 10x peak earnings with all of the serious ethical/moral/legal problems both inherent in the business model and specific to the personalities at the top.

What I think happened:

Retail investors + an aggressive IR outreach campaign* + a belief that CEO had found capital allocation "religion" + a lack of awareness of management's shenanigans. Presumably no one buying this knew about the Houston single family houses or the aircraft fetish


* Maybe the only company I have ever contacted that immediately emailed me back and, unprompted, wanted to set up a phone call.
Former Teldar Paper Vice President

Gregmal

  • Hero Member
  • *****
  • Posts: 5158
Re: RICK - RCI Hospitality
« Reply #79 on: March 13, 2020, 05:30:36 PM »
Or...this is like....just another example of....

a company that is somewhat(actually entirely) controversial and has some real issues falling when the market gets kerplunked in a big way, and all the long time haters who watched it run up, multi bagger style, get to have their 15 minutes of "I was right all along!".  Yawn