Clearly the management team sees the business model as unsustainable. The foreign franchisees are bailing out due to management's abuse of its operators. Domestic operators are losing cash flow and piling on debt to chase whimsical notions that cost hundreds of thousands of our dollars to pump into real estate that MCD owns.
They are cashing out high and will buy low when the price eventually craters and operators go out of buisness. Then those restaurants will also be on fire sale, or free, to be resold to scoop up profits off the restaurants, plus the stick.
What's not to like if I you are in management? BTW- you collect massive rents for the while money ride.
They acquire that many shares by Stock Options that are granted as part of their compensation package. The theory is that if the company stock price climbs the leaders will do well.
The problem with this theory is that if you are selling out part of the business (Franchisee’s) to raise the price, then you are killing the Golden Goose that laid the Golden Eggs. Eventually the whole scheme will implode. At that time the company will look like a wasteland.
The wasteland will only be recovered with much pain and loss, but it will not be recovered by the current leadership.
This has been similar to the 80’s and 90’s takeovers, the difference is this one has been done internally. Rewatch Wall-street and Wall-Street Money never Sleeps movies.
In a meeting today I heard that Easterbrook cashed in $72,000,000.00. I don't know what it says but those guys are doing very well. I also heard that the war with NOA is not over. Casper is speaking to various business organizations and MCD does not like it. He spoke to the Chicago Economic club and MCD got a copy of the speech. Email's were flying.
That $72 mill sounds like an exaggeration. Keep in mind this all has to be disclosed and the shareholders have to pass judgment. Or, maybe it's just Easterbrook bragging about how rich he's gotten. .
Of course, I don't know that it is factual and I know that those things require full disclosure. I was in a meeting today with Operator leadership that go up there often and they were talking about it and said it.
Stock Price Steve and Clueless Chris (Howdy Doody) are artificially inflating the stock price for their own selfish benefits (excessive stock buybacks,debt financed record dividends, required operator paid real estate improvements, etc). They are/will bail out at the peak and leave the company in a precarious position IMHO.
Why Wall Street is oblivious to the negative sales trends and TC declines is astounding. This stock should be selling FAR lower based on the underlying weak system fundamental economics.
The issue is top management folks their compensation is only tied to one thing stock price/shareholder value which in some respects they have falsely created for short-term value. They have fundamentally & quietly made changes that the NFLA, NOA does not know about and have absolutely no control over through the sale of their assets internationally and in the USA selling many of their assets and real estate which with the current BOD, CEO and US president will continue as long as they have the reins of the company they are silently raiding the company.
If a portion of their compensation was related to the profitability of the suppliers & franchisees it would not be nearly as high. This company will be fundamentally different 10-20 years from now. When these folks are gone the next group is going to have a harder time as many of the current assets they could get their hands will be gone. Look for the next group to grow through diversification and using revenue/cash to buy other companies or start to sell off real estate they own. They will never be able to achieve growth through just the restaurants.
Buckle up the ride is a ripple now but sure to get bumpy down the road!
12 comments:
RAT using insider info to flee a sinking ship.
We don't often discuss stocks here but it's obvious that these elite insiders are convinced MCD shares aren't going higher.
.
Clearly the management team sees the business model as unsustainable. The foreign franchisees are bailing out due to management's abuse of its operators. Domestic operators are losing cash flow and piling on debt to chase whimsical notions that cost hundreds of thousands of our dollars to pump into real estate that MCD owns.
They are cashing out high and will buy low when the price eventually craters and operators go out of buisness. Then those restaurants will also be on fire sale, or free, to be resold to scoop up profits off the restaurants, plus the stick.
What's not to like if I you are in management? BTW- you collect massive rents for the while money ride.
How do those guys in top management accumulate so much stock so fast? I think Chris K. just cashed in near seven million dollars worth.
They acquire that many shares by Stock Options that are granted as part of their compensation package. The theory is that if the company stock price climbs the leaders will do well.
The problem with this theory is that if you are selling out part of the business (Franchisee’s) to raise the price, then you are killing the Golden Goose that laid the Golden Eggs. Eventually the whole scheme will implode. At that time the company will look like a wasteland.
The wasteland will only be recovered with much pain and loss, but it will not be recovered by the current leadership.
This has been similar to the 80’s and 90’s takeovers, the difference is this one has been done internally. Rewatch Wall-street and Wall-Street Money never Sleeps movies.
Anyone with common sense would see this as mr. K is a short timer. Will Mr. BBV2020 be at the 2020 worldwide?
In a meeting today I heard that Easterbrook cashed in $72,000,000.00. I don't know what it says but those guys are doing very well. I also heard that the war with NOA is not over. Casper is speaking to various business organizations and MCD does not like it. He spoke to the Chicago Economic club and MCD got a copy of the speech. Email's were flying.
That $72 mill sounds like an exaggeration. Keep in mind this all has to be disclosed and the shareholders have to pass judgment. Or, maybe it's just Easterbrook bragging about how rich
he's gotten.
.
Of course, I don't know that it is factual and I know that those things require full disclosure. I was in a meeting today with Operator leadership that go up there often and they were talking about it and said it.
Meanwhile 23% of MCD operators are FINANCIALLY INELIGIBLE for growth or rewrite!
Stock Price Steve and Clueless Chris (Howdy Doody) are artificially inflating the stock price for their own selfish benefits (excessive stock buybacks,debt financed record dividends, required operator paid real estate improvements, etc). They are/will bail out at the peak and leave the company in a precarious position IMHO.
Why Wall Street is oblivious to the negative sales trends and TC declines is astounding. This stock should be selling FAR lower based on the underlying weak system fundamental economics.
The issue is top management folks their compensation is only tied to one thing stock price/shareholder value which in some respects they have falsely created for short-term value. They have fundamentally & quietly made changes that the NFLA, NOA does not know about and have absolutely no control over through the sale of their assets internationally and in the USA selling many of their assets and real estate which with the current BOD, CEO and US president will continue as long as they have the reins of the company they are silently raiding the company.
If a portion of their compensation was related to the profitability of the suppliers & franchisees it would not be nearly as high. This company will be fundamentally different 10-20 years from now. When these folks are gone the next group is going to have a harder time as many of the current assets they could get their hands will be gone. Look for the next group to grow through diversification and using revenue/cash to buy other companies or start to sell off real estate they own. They will never be able to achieve growth through just the restaurants.
Buckle up the ride is a ripple now but sure to get bumpy down the road!
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