My thoughts on yesterday's call: 1) I have bee
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Posted On: 06/18/2018 7:26:45 AM
My thoughts on yesterday's call:
1) I have been hard on Joey because as CEO, he is responsible for the direction of the company. This also means he gets credit when things go well. For the last few years, Joey Parsi has demonstrated a tendency to blame everyone but himself for Giggles' failures. It's the shareholders' fault that the offering was not successful, it was the Bahrain investor's fault that the LOI never materialized, it's the weather's fault for poor sales, etc.
Yesterday he attempted to take some responsibility, finally, but he ultimately failed at that, too. Instead of taking criticism like a man and conducting himself in a professional manner, he lashed out at valid shareholder concerns. For a comparison, google "Steve Jobs responds to criticism" to see how a true pro would have handled it -- and Steve was just as vested in Apple as Joey is in Giggles, so the "it's my baby" excuse doesn't have wings here.
2) While Joey is smart to state that there will be no future announcements of potential opportunities, literally thirty seconds later he starts talking about potential acquisitions of local party planning businesses. While I get he prefaced it repeatedly with "this is in no ways a sure thing,,," the bigger issue is that it seems like Giggles is struggling to figure out proper growth strategies.
None of us invested in a birthday party company. We invested in a restaurant. The immediate goal should be to find ways to bring more people to the restaurants and get them to spend more money there. Diluting current shareholders by issuing stock to acquire small-time party businesses in Los Angeles will do nothing to make this a bigger company going forward. It's the wrong move, and one I hope does not come to fruition.
3) Philip Gay is a professional. I personally think he is at the tail end of his career, and is in this for basically free shares that may or may not be worth something, but at least he provided a voice of reason and calm. The call would have been a lot worse if he were not around to keep Joey in line.
4) Franchising may be their goal, but it's not going to happen. $600,000 give or take to open a location is going to be way too much money for most franchisees, excluding the $75k-$100k franchise fees. Joey tried to claim that the return on investment is around two or three years, but look at Giggles current financial situation and most people will see through that BS. If these stores were such a great investment opportunity, Giggles' stock wouldn't be trading at .015 and dropping.
5) $225k is still WAY too much money to be paying a co-CEO who is responsible for just two locations. I think a salary somewhere more in like of the $80-$100k range would be appropriate, if that. And the fact that he just awards himself new shares to "make up the difference" is absurd. Compensation should be tied to performance, period. And Joey's performance is sub-par.
6) Transparency: While I applaud Joey for trying to be more transparent with shareholders, what this company needs right now is an independent BoD that is voted in by the shareholders, and to whom the CEOs are accountable. If the CEOs are not doing their jobs, they should be replaced like with any other company. This is not a private company so stop running it like one.
7) Joey's answer regarding the weather as a reason for the decline in parties was also off the mark. Parties are booked months in advance, before anyone has any idea about the weather. And if a kid wants a Giggles party, the weather is moot. Parents will book the party even if the park is an option.
It's clear there is no real strategy or plan to get things back on track. The shareholders don't trust Joey, nor do traditional lenders, nor do mall operators. Without cash, this investment is pretty much dead no matter how great the concept is. My guess is that Giggles will eventually go out of business, and someone more competent will give it another go but do it right.
9) Joey mentioned people like Rand Ferris, but he was extremely vague on just how someone like him is actually adding value? Even if Ferris has all the experience in the world, what is he doing to bring in money to the company? This advisory board is a huge waste of time.
10) The SEC investigations -- I'm going to continue pressing this angle. There has been too much BS for too long to continue to give Joey a free pass here. If it sabotages the investment, so be it...I personally think it's the only way to get Joey out of the driver's seat before he drives this car off a cliff.
1) I have been hard on Joey because as CEO, he is responsible for the direction of the company. This also means he gets credit when things go well. For the last few years, Joey Parsi has demonstrated a tendency to blame everyone but himself for Giggles' failures. It's the shareholders' fault that the offering was not successful, it was the Bahrain investor's fault that the LOI never materialized, it's the weather's fault for poor sales, etc.
Yesterday he attempted to take some responsibility, finally, but he ultimately failed at that, too. Instead of taking criticism like a man and conducting himself in a professional manner, he lashed out at valid shareholder concerns. For a comparison, google "Steve Jobs responds to criticism" to see how a true pro would have handled it -- and Steve was just as vested in Apple as Joey is in Giggles, so the "it's my baby" excuse doesn't have wings here.
2) While Joey is smart to state that there will be no future announcements of potential opportunities, literally thirty seconds later he starts talking about potential acquisitions of local party planning businesses. While I get he prefaced it repeatedly with "this is in no ways a sure thing,,," the bigger issue is that it seems like Giggles is struggling to figure out proper growth strategies.
None of us invested in a birthday party company. We invested in a restaurant. The immediate goal should be to find ways to bring more people to the restaurants and get them to spend more money there. Diluting current shareholders by issuing stock to acquire small-time party businesses in Los Angeles will do nothing to make this a bigger company going forward. It's the wrong move, and one I hope does not come to fruition.
3) Philip Gay is a professional. I personally think he is at the tail end of his career, and is in this for basically free shares that may or may not be worth something, but at least he provided a voice of reason and calm. The call would have been a lot worse if he were not around to keep Joey in line.
4) Franchising may be their goal, but it's not going to happen. $600,000 give or take to open a location is going to be way too much money for most franchisees, excluding the $75k-$100k franchise fees. Joey tried to claim that the return on investment is around two or three years, but look at Giggles current financial situation and most people will see through that BS. If these stores were such a great investment opportunity, Giggles' stock wouldn't be trading at .015 and dropping.
5) $225k is still WAY too much money to be paying a co-CEO who is responsible for just two locations. I think a salary somewhere more in like of the $80-$100k range would be appropriate, if that. And the fact that he just awards himself new shares to "make up the difference" is absurd. Compensation should be tied to performance, period. And Joey's performance is sub-par.
6) Transparency: While I applaud Joey for trying to be more transparent with shareholders, what this company needs right now is an independent BoD that is voted in by the shareholders, and to whom the CEOs are accountable. If the CEOs are not doing their jobs, they should be replaced like with any other company. This is not a private company so stop running it like one.
7) Joey's answer regarding the weather as a reason for the decline in parties was also off the mark. Parties are booked months in advance, before anyone has any idea about the weather. And if a kid wants a Giggles party, the weather is moot. Parents will book the party even if the park is an option.
It's clear there is no real strategy or plan to get things back on track. The shareholders don't trust Joey, nor do traditional lenders, nor do mall operators. Without cash, this investment is pretty much dead no matter how great the concept is. My guess is that Giggles will eventually go out of business, and someone more competent will give it another go but do it right. 9) Joey mentioned people like Rand Ferris, but he was extremely vague on just how someone like him is actually adding value? Even if Ferris has all the experience in the world, what is he doing to bring in money to the company? This advisory board is a huge waste of time.
10) The SEC investigations -- I'm going to continue pressing this angle. There has been too much BS for too long to continue to give Joey a free pass here. If it sabotages the investment, so be it...I personally think it's the only way to get Joey out of the driver's seat before he drives this car off a cliff.
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