Mickey D's spin

Used to own MCD but sold it years ago when it was becoming more of a “franchise renter” than “restaurant owner”. Also saw where they hit an all time high yesterday so may or may not have missed out on more $$. Can’t remember what I bought with the proceeds but could be way ahead.

The only fast food franchise I’d be interested in owning is Chick-fil-a but it is not publicly traded so unless I try to make the cut to become a location owner*, not going to happen.

  • read many articles where about the only thing tougher is becoming a Navy Seal

Yes, that was the “better than expected” hype by the media. The thing about companies being run like that is the ride up is fun, because management is hollowing out the company to juice the price of the stock. Like participating in a Ponzi, early entrants can do well. The bag holders when the Ponzi collapses don’t do well.


You know Steve,if you would just stop watching the news,you might be less aggravated.

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Stopped at an MCD mid-afternoon today. Drive up backed up. Parking lot nearly full, but the store is on a small lot, not nearly enough parking spots for the side of the dining room.

I had not paid much attention to Mickey D’s for years, avoiding beef in favor or roasted turkey or grilled chicken.

DesertDave used to talk about customer direct order entry kiosks. These are SOP at Mickey D’s now. One register open, and 6 or 8 do it yourself kiosks. Enter your order at the kiosk, grab the numbered table sign and have a seat. They bring your food to you. I have not seen that at any other fast food place.

There were a handful of old phartz eating alone in the place today. A couple gaggle of teens. Several moms with pre-teen spawn in tow. Most of these people will be continuing to eat Mickey D’s for decades.

Nice business, but the CEO is running it like a Ponzi. Seems the only way to play MCD is as a trade: ride the runup in the stock, as that is clearly the priority of the CEO, then sell the moment the current CEO either retires, or moves on to another company to loot, because he won’t leave any money on the table for his successor.


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Mrs. Goofy and I own a middling position (~100k) in a private company thanks to her employment there a while back. Dividends have been OK, if sporadic but last year it was a whopper. More than 4 times what we optioned the stock at 20 years ago. In fact we were ahead of break-even even before this payout.

What we learned at the shareholders meeting this year is that they borrowed almost the full equity of the company to pay it “because loan rates were so low…”

Well. No dividend this year, some question whether the company will survive if there’s a decent recession. (Technology changes also play a factor,)

Yes, they liquidated the company in plain sight giving immense payouts to the principle shareholders and leaving almost nothing in the business. There is nothing I could or would have done differently since the shares are private and have no significant assigned value, but what once was will probably be no more. And I stupidly didn’t understand it until now.


“End of the dollar menu”. I notice that Wendys is advertising the Big Bag with 2 burgers and fries for $5. Burger King has coupons for 2 Whopper Jrs and fries for $4.99. And 2 cheeseburger meal coupons w beverage for $5.

Dollar menu may be going away but the $5 lunch is still out there in the world of fast food.

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The pump seal company I worked for was closely held. When people advanced to a high level, they were expected to buy stock. Yield wasn’t much, and, by the end of the 70s, the company was stagnating, but, if you wanted to be a honcho, you had to buy stock.

There were several heirs of the founders that wanted to cash in their shares. One of the heirs, that I know of, had a big tax problem, needed cash, and the pump seal company shares were providing the lowest return, so they were nominated for sale. There was an accounting process to put a value on the shares. The only possible buyer was the company itself.

Remember the scene in “It’s A Wonderful Life” were there is a run on the Building And Loan, and George is begging people to only withdraw what they really need to make it through the week? The walls at the pump seal company had ears. The President/CEO/Chairman was heard on the phone, with the heirs, and their lawyers, begging them to not redeem their shares, because the cash outflow would put the company in a bind. I don’t know exactly how that worked out tho.


I exploited that BK two cheeseburger/fries/pop coupon last week. I was concerned about that being a lot of food. They were the dinkiest cheeseburgers I ever saw. Remember the burgers Mickey D’s used to sell for 15 cents? About that size.


Then you haven’t been looking. They’re at my local Taco Bell. Carl’s Jr was an early adopter. Wendy’s. Burger King. Probably a few others. They’re also encroaching into full service restaurants.


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Haven’t been in a Taco Smell in years/decades. Have been in a couple Wendy’s, three or four Arby’s, a couple Tim’s and a BK, within the last six months, and have not seen those order entry kiosks.


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In the “looting” category, today’s news:

Albertson’s Grocery chain, although it owes $5B to workers’ pension fund and $7B to creditors has decided that now would be a good time to award $4B to “shareholders”, mostly the private equity continuum that bought the chain and already loaded it with debt.

Some people have noticed.


Hey, all those MBA’s have to earn their keep. They are really good at take the money and run. Can they get away with it?

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For those not paying attention, this is why capitalism has gotten a bad name. And it’s deserved unfortunately. There is no way to justify this action by the company.


Obviously, too much emphasis on increasing stock price and not enough on increasing company value. I’ve gone back to being a value investor, which means I can’t find a lot to buy right now.