Thanks, Lisa, for bringing up the upcoming BK IPO. The current state of the Burger King brand may
even be weaker than Lisa suggests. BK lags not only McDonald's but Wendy's too, at least in terms of sales. And with the boom in (relatively) healthier fast food options like Baja Fresh, Qdoba, In-n-Out, and El Pollo Loco, BK's interest in an infusion of capital and a brand makeover is understandable.
But it also makes me wonder if the retail IPO is back. I would have predicted the bursting of the dot com bubble would have had a longer-lasting impact, but maybe after Google's success retail investors are again thinking they know how to pick stocks. Chipotle's huge first-day pop makes me think that some investors are somehow wildly mixing up the old adages (1) Know thyself, (2) Invest in what you know and (3) You are what you eat.
The return of the retail IPO might also explain why BK is spending a few million on a Super Bowl spot on Sunday. It will be a disappointing investment in terms of selling burgers, but if it increases the first-day pop ...
My prediction: The Steelers win, the Whopperettes flop, and the BK IPO nonetheless has a first day pop that exceeds Matt Hasselbeck's passing yardage.
UPDATE: Bill Sjostrom, following the money trail, notes that the IPO is just an exit for the private equity guys. Not that there's anything wrong with that.
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1. Posted by David on February 3, 2006 @ 22:16 | Permalink
I'm all about the double-double, but In-n-Out is not health food.
2. Posted by Vic on February 4, 2006 @ 0:40 | Permalink
Relatively. I'm hardly a nutritionist, but I'd have to guess it's better than BK. Their food is fresh and not frozen, and I suspect they use healthier oils for the fries and that sort of thing. Plus you can order it protein style (aka atkins style), i.e wrapped in lettuce and no bun.
I think I've been in SoCal too long.
3. Posted by Lisa Fairfax on February 4, 2006 @ 11:27 | Permalink
Having grown up in Southern Cal I have to admit to a strong bias towards In-n-out, but it actually appears that Burger King has gained strength in the market by focusing on bigger, meater sandwiches (including breakfast sandwiches). So maybe it is the contrast that investors will find appealing.
Vic's point on the IPO market is well taken. Some analysts have been more cautious in their forecasts about both the strength of the Burger King offering and the IPO market more generally. Regardless of the outcome, I think Burger King and its new CEO--who appears to have injected a sense of optimism into the company--recognize that the company needs to take advantage of this (possibly small) window of opportunity.
4. Posted by tRJ on February 4, 2006 @ 11:38 | Permalink
Burger King is awesome, far surpassing crummy old McDonald's. I hope they succeed and can offer me even more onion ring options!
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